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Prey to doubt, all things considered, after the declarations of two members of the Fed on Monday, and while inevitably nervously awaiting the quarterly publication of NVidia on Wednesday after the market, the CAC 40 closed Tuesday’s session down by 0.67% to 8,141 points, in any trading volumes.
On Monday, two Fed executives, Michael Barr, vice-president of the Federal Reserve in charge of banking regulation, and Philip Jefferson, another vice-president of the Fed, insisted that a restrictive monetary policy should remain the norm. a long time to go for a truly effective fight against inflation. A normalization of the job market, still under strong tension, is necessary.
Doubt is now entering the minds of investors looking for clues about the Fed’s future intentions regarding its rate policy, while the Federal Reserve Minutes will be published this Tuesday at 8:00 p.m. As a reminder, this is the traditional chronological report of the debates which took place at the last monetary policy meeting (FOMC).
In the immediate future, the American 10-year finds some momentum, in this context, towards 4.43, whereas it touched 4.33 on 05/15 following the publication of inflation figures considered reassuring.
No major statistical figures came to liven up this somewhat dull session. Note nevertheless the positive monthly balance of the trade balance in the Euro Zone (+17.3 billion euros, below expectations). We will have to wait until Wednesday for the calendar to thicken somewhat, with sales of old homes across the Atlantic, but especially Thursday with PMI activity indicators in the Euro Zone and the closely monitored weekly registrations for unemployment benefits.
On the value side, on the CAC 40 first of all, Sanofi, in decline at midday, finally closed up 0.9% while the pharmaceutical group announced on Tuesday a collaboration with OpenAI (the creator of ChatGPT) , to use artificial intelligence in drug development.
Excluding the flagship index, Clariane continued its rise, and gained 7.6% after peaking at 23% at the start of the session. The retirement home operator announced its roadmap for 2023-2026, a few days after unveiling capital increase operations intended to strengthen its financial structure.
Carmila increased by 3.5%, supported by an increase in recommendation from Citigroup, which went from sell to buy with a price target also raised from 11 euros to 19 euros.
Atos lost 1.20% while Daniel Kretinsky will improve his offer to take over Atos in order to convince recalcitrant creditors, according to information from BFM Business.
On the other side of the Atlantic, the main equity indices gained a little ground on the eve of the Minutes and the publication of NVidia. The Dow Jones index gained 0.17% 39,873 points. The S&P500, a broad index, gained 0.25% to 5,321 points. The technology-heavy Nasdaq Composite rose 0.22% to 16,832 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 $1.0860. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $78.80.
On the agenda this Wednesday, to follow as a priority across the Atlantic, sales of new homes at 4:00 p.m. and the Fed Minutes at 8:00 p.m.
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. If we zoom out a little, it is a wide band of 400 points which can accommodate, in the weeks to come, nervous oscillations.
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 8220.00 points.
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