CAC 40: Levitating

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After a week full of monetary meetings last week, and awaiting major macroeconomic figures between Tuesday and Friday, the CAC took the opportunity to ease off, ending the session on Monday in perfect balance, at 8,151 points. The market remains confident in a scenario of three federal rate cuts this year, with a first loosening of the monetary tap in June. The ECB could even be the first to draw, which would constitute an unprecedented event.

In the immediate future, operators will focus Tuesday on durable goods orders and the consumer confidence index (Conference Board), Thursday on American growth data, and Friday on PCE prices, the preferred barometer of the Fed in its assessment of inflation.

“As the Fed prepares for monetary easing, investors will be particularly watching consumer sentiment (Thursday) and core PCE inflation (Friday) this week. The Fed, ECB and BoE are expected to begin lowering their key rates in June, but the scale of the rate cuts implemented by the Fed this year could disappoint”, for César Perez Ruiz, Head of Investments and CIO at Pictet Wealth Management

On the value side, Dassault Aviation gained 7.3% driven by an advisory upgrade from Exane BNP Paribas to “outperformance” compared to “neutral” previously. Societe Generale fell 1.9% as Morgan Stanley moved from “overweight” to “line weighting”. Believe advanced 4.4% while a major obstacle was removed to allow a stock market battle around its takeover.

On the other side of the Atlantic, the main equity indices ended Monday’s session in the red, like the Dow Jones (-0.41%) and the Nasdaq Composite (-0.27%). . The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, fell by 0.31%.

An update on other risky asset classes: around 8 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0850. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $81.80.

On the agenda this Tuesday, to follow in priority orders for durable goods at 1:30 p.m., the S&P Case Schiller real estate price index at 2:00 p.m. and the consumer confidence index (Conference Board) at 3:00 p.m.

Let us continue to point out that since Monday, Wall Street opens at 2:30 p.m. (Paris time), and not 3:30 p.m., quite simply because the East Coast of the United States has already switched to summer time, and we have not yet. The big statistical meetings, often scheduled for 2:30 p.m., are therefore scheduled in the interval at 1:30 p.m.

KEY GRAPHIC ELEMENTS

Thanks to the crossing volumes, the bullish extension since Tuesday and the sectoral federation, we can swing the 8,000 psychological points into support, against which in the long term, a pullback (graphic rejection of confirmation) is not excluded. Now is the time to take a breather from the lessons. The CAC index has traced, in contact with the upper Bollinger band, two candles where the low points, the opening level and the closing level merge. And this before beginning a slow decline towards the lower part of an ascending channel.

FORECAST

Considering the key graphical factors that we have identified, our opinion is neutral on the CAC 40 index in the short term.

We will take care to note that crossing 8220.00 points would revive the buying tension. While a break of 8000.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart