(News Bulletin 247) – The financial markets are feeling the blow after the start of Russian military aggression in Ukraine, in the form of a military operation primarily targeting airports and strategic sites. Joe Biden, by revealing Vladimir Putin’s concrete intentions earlier in the week, against a backdrop of the failure of the various attempts at diplomatic negotiations. In pre-opening, the CAC 40 (-0.10% to 6,780 points) suggests a very sharply lower opening. The DAX even more, given the very large dependence on Russia for its natural gas supplies.
The Kremlin has now crossed the Rubicon: after having recognized, by openly supporting the separatists in Dombass, the independence of two regions in this eastern part of Ukraine, it is going on the military offensive, which is a further step in the escalation, and further materializes the entry into a new Cold War with the West.
In terms of statistics, the various consumer price indices came out, in final data for January, at +2.3% in the Euro Zone, at an annualized rate, excluding volatile elements (food, energy, alcohol and tobacco).
On the values side, the two car manufacturers present in the CAC have made the big difference, Stellantis (+4.54% to 17.078 euros) taking full advantage of its quarterly, and Renault (-4.27% to 32.135 euros) suffering from its exposure to Russia. Danone’s publication is also well received (+3.9%), the agrifood giant having managed to stabilize its operating margin in an inflationary context, thanks to a “proactive attitude on prices” and efficiency plans put in place.
On the other side of the Atlantic, the main equity indices fell significantly on Wednesday, like the Dow Jones (-1.38% to 33,131 points) or the Nasdaq Composite (-2.57% to 13,037 points). The S&P 500, benchmark barometer of risk appetite in the eyes of fund managers, lost 1.84% to 4,225 points.
A point on the other risky asset classes: around 08:00 this morning on the foreign exchange market, the single currency was trading at a level close to $1.1320. A barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $91.60.
To be followed in priority, on the agenda this Thursday, the preliminary data of Q4 GDP in the United States at 2:30 p.m. and crude inventories across the Atlantic at 5:00 p.m.
KEY GRAPHIC ELEMENTS
The 6,760 points, which we have identified so far as a gradually weakened floor, will give way this morning, on a wide gap, opening the way to another market phase. Recall that the index traced from February 16 to 18 a combination of candles in three crows. This combination was immediately followed by a very significant bearish engulfing structure, accompanied by volumes that were far from timid for a session, let’s not forget, without American benchmarks. The last phase of weakening of the aforementioned support will therefore have been aggressive.
In view of the key graphic 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 trading below the resistance at 7036.00 points.
Hourly data chart
Chart in daily data
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