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We will note in the preamble that despite the public holiday nature of this Monday (Pentecost), the Parisian market is opening, under usual opening and trading conditions.
After a small rally towards the zeniths, then a stabilization, the CAC 40 declined over the last two sessions of the week, while China is once again raising some concerns. The flagship French index (-0.63% Thursday) fell 0.26% on Friday to 8,167 points.
In April, retail sales in China, a barometer of consumption, slowed their growth to 2.3% after 3.1% the previous month, and a consensus at 3.7%, according to economists polled by Bloomberg. A sign that the Chinese authorities have become aware of the issue, Beijing unveiled various measures on Friday to revive its real estate sector, reported Agence France Presse.
Still on the statistical side on Friday, currency traders digested the final consumer price data in April, for the Euro Zone this time, which EuroStat, the statistical office of the European Union, has just published. No deviation to report compared to the first estimates. Excluding food, energy, alcohol and tobacco, prices increased by 2.7% annually. Figures which are stable compared to March.
The day before, today’s indicators (registrations for unemployment benefits, Philly Fed, housing starts and building permits) did not contain any unpleasant surprises (in the Fed’s sense!). Investors also took note of the publication of industrial production for April in the United States, which fell by 0.3% over one month. Which “continues the series of weaker activity data and will further reinforce expectations of a reduction in interest rates from the Fed (American Federal Reserve, Editor’s note) in September,” says Capital Economics. And on the production volume front, stable, and the production capacity utilization rate.
The CME Group’s FedWatch tool now puts the probability of a federal rate cut at the end of the FOMC on September 18 at 67.6%. The tool transcribes the probabilities of changes in federal rates and American monetary policy based on the price of 30-day federal funds futures contracts.
On the values side, Engie, which got off to a bad start at the opening, recovered and finally fell by 0.06% after reporting slightly lower results in the first quarter, but in line with market expectations. Carmat lost 22.5% after announcing a capital increase of 16 million euros which will allow it to extend its financial visibility until August. The group will need an additional 30 million euros to ensure its operations over the next twelve months. Sodexo gained 3.2% while Morgan Stanley raised its advice to “overweight”, the bank showing confidence in the dynamics of its activities in the United States and the simplification of its structure.
On the other side of the Atlantic the main equity indices finished in scattered order not far from balance: +0.34% for the Dow Jones and -0.07% for the Nasdaq Composite. The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, managed to gain 0.12% to 5,303 points. A clearly wait-and-see market before the publication of a heavyweight of the rating, true star of the Shepherd of the market, NVidia this week.
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 $1.0880. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $79.80.
On the agenda this Monday, to follow as a priority a series of speeches, speeches, interventions and other interviews with Fed executives, in particular during an event organized by the Atlanta branch.
KEY GRAPHIC ELEMENTS
The resistance level of 8,120 points gave way on Thursday 09/05 in insignificant volumes due to the absence of numerous operators. However, in the very short term, the new working framework is between these 8,120 points, and the absolute peaks close to 8,220 points, i.e. a thin band of around a hundred points. All taking place at the heart of an ascending channel, the lower limit of which (support) can be tested quickly.
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 8120.00 points would restart the selling pressure.
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