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Penalized mainly by the well-represented luxury sector, the CAC 40 contracted by 0.61% to 8,092 points on Wednesday, at the end of a session marked by the nervous wait for the Fed Minutes, the traditional report of the last monetary policy meeting, but above all by the quarterly publication of NVidia, the highlight of the ball of publications of the major American technology groups. Two events after the Paris closing.
If the first disappointed, the second satisfied the financial community.
The Minutes showed that J Powell ruled out the idea of a final upward movement in the Fed Funds, but that certain members of the Board did not forbid it. A cold realism even though the last publication of retail prices had shown a significant improvement in the situation.
“After several months of upward surprises, American inflation finally stalled in April and even slightly surprised the downward consensus,” notes Thomas Giuduci, head of bond management at Auris Gestion. “These figures confirm that the disinflation movement is not dead but, once again, we will have to be patient to return to levels more in line with the expectations of central banks. While this publication is naturally good news, the target of 2% nevertheless still seems a long way off, with American inflation having been above 3% for more than 3 years now. In the eyes of the market, the worst, namely a rebound in inflation, seems. have been avoided.”
As for NVidia, the new star of the Shepherd of the market, Q1 sales excited the market, at more than $26 billion, once again exceeding expectations which were nevertheless greedy.
On the value side, it is the luxury files which most contributed to the decline of the CAC 40. Hermès fell by 4.3%, followed by LVMH (-2.1%) and Kering (-0.95%) after the publication of Chanel’s results, and especially the declarations of its financial director on the market environment, which presents itself as “more difficult”. Schneider Electric gained 0.8%, the market taking note of the abandonment of the takeover of Bentley Systems by the French group.
On the other side of the Atlantic, the main equity indices ended Wednesday’s session on a defensive note, with NVidia results only released after the close. The Dow Jones contracted by 0.51% to 39,671 points and the Nasdaq Composite by 0.18% to 16,801 points. The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, fell by 0.27%, maintaining a buffer of more than 300 points above the highly symbolic 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 $1.0820. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $79.90.
On the agenda this Thursday, to follow as a priority a battery of PMI activity indicators in first estimates for May (synthetic data for the Euro Zone at 10:00 a.m. and weekly registrations for unemployment benefits across the Atlantic at 2:30 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 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.
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