CAC 40: A dose of questions, a hint of nervousness

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The CAC 40 ended Friday’s session symbolically in the red (-0.01% at 8,022 points), ending a week made very nervous by the issue of rates, the geopolitical situation in the Middle East, and the start of the dance of quarterly, contrasting to say the least. On Friday in any case, it is L’Oréal (+5.04%) which will have acted as shock absorbers, by publishing an excellent quarterly copy.

The macroeconomic statistics published yesterday, whether on the employment front with registrations for unemployment benefits or on the industrial front with the Philly Fed index, reinforced the scenario of a delay, by the Fed, of its action on the monetary tap. To mark the occasion and send a signal to the market, the powerful monetary institution could begin lowering rates in July (44% probability according to the CME Group’s FedWatch tool), before taking a long pause.

On the geopolitical front, during the night from Thursday to Friday, several explosions occurred in Iran and drones were shot down by the army near a military base. However, Iranian authorities clarified that there was no missile attack. Questioned by AFP, the Israeli army did not comment. But American diplomatic officials cited by American media reported that Washington had been warned by Israel of an attack on Iran, without approving this operation.

This various information comes after the unprecedented attack last weekend on Israel by Iran, even though 99% of the missiles and drones sent by Tehran had been intercepted by the Israeli army. Since this attack, the market has feared a response from Israel which would be synonymous with conflagration in the Middle East.

On the values ​​side, Sodexo (+1.6%) and its former subsidiary Pluxee (+5%), listed on the stock exchange since last February, have both published growth and half-year results better than expected by the market.

Conversely, Edenred suddenly dropped in the afternoon to close down 6.9%, after press information on the investigation in Italy, citing the request by the Rome prosecutor’s office for “the indictment of four people, former managers of Edenred Italia”, a local subsidiary of Edenred. The resident of the CAC 40 reacted to News Bulletin 247, emphasizing that the indictment of the four former directors constitutes “a step” which is “an expected event within the framework of the investigation. It does not bring any new element “.

EssilorLuxottica limits its decline to 0.7%, the optical group having published growth in line with expectations in the first quarter.

On the other side of the Atlantic, the main equity indices ended Friday’s session in scattered order, like the Dow Jones (+0.56%) and the Nasdaq Composite (-2.05%). , penalized in particular by a semiconductor sector plagued by sustained profit-taking. The S&P500, the reference barometer of risk appetite in the eyes of fund managers, contracted by 0.88% to 4,967, below the highly psychological threshold of 5,000 points.

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 $1.0630. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $83.70.

On the agenda this Monday, to follow in priority the consumer confidence index in the Euro Zone at 4:00 p.m. and a speech by C Lagarde, President of the ECB, at Yale University.

KEY GRAPHIC ELEMENTS

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 starting a slow decline towards the lower part of an ascending channel (in black) on the daily chart. The session of Tuesday April 2, by the volumes, the length of the red body of the corresponding candle, reinforced the 8,220 points as a difficult level to cross.

Then a major technical event occurred, namely the breaking of the gap, the highly symbolic threshold of 8,000 points. The latter, however, does not appear as a scar on the index in the sense that it was filled in from the following session.

We are in the heart of a deep, legitimate breath on the flagship tricolor index.

Two bearish targets present themselves: the bullish gap of February 22, the lower limit of which is worth 7,821 points, then the intermediate support at 7,700 points. Until then, the occasional formation of sharp downward acceleration in prices is not excluded, before remobilization of the buying camp.

FORECAST

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

This bearish scenario is valid as long as the CAC 40 index is below resistance at 8120.00 points.

Hourly graph

Daily Data Chart