(News Bulletin 247) – This article, with open access, is produced by the stock market analysis and strategy research team at News Bulletin 247. To ensure you don’t miss any opportunities, consult all the analyzes and discover our portfolios by accessing our Privileges area.
Penalized by oil services, automobile equipment manufacturers and to a lesser extent by the banking sector, the Parisian market experienced another session marked by nervousness, the CAC 40 falling by 0.75% to 7,937 points, getting closer to a technical floor weakened around 7,820 points.
However, the new job offers in the United States (JOLTS) were not alarming. But operators are more circumspect than ever about the Fed’s intentions for the coming months. Other important publications on employment will punctuate the week (registrations for unemployment benefits, NFP report). And this Wednesday, the investigation by the private human resources firm ADP.
For Alexandre Baradez, “we can clearly say that “data dependence” is sublimated by the Fed and not its president. Despite a significant decline in underlying inflation since its peak in 2023, but in the face of the anemic progress made this year , Jerome Powell has adopted a much more neutral tone and a centrist positioning for several meetings, after the communication error in December where his “pivot” had triggered a wave of unreasonable expectations from the market on the number of rate cuts coming in 2024. While the markets currently only anticipate one or two rate cuts this year, at the start of the year they anticipated nearly 6 cuts.”
The market is wary of a return of inflationary pressures. But other advanced indicators than employment should be looked at… Christopher Dembik, investment strategy advisor at Pictet AM, identifies two weak signals: “the increase of almost 40% in the price of international maritime transport in one months or the surge in the price of agricultural raw materials”, taking the example of orange juice and butter.
The European Central Bank concludes a Governing Council meeting tomorrow. Meeting which should result, barring any major surprises, in a reduction in key rates of 25 basis points.
After this first cut, “risks are tilted towards smaller reductions, mainly due to the stickiness of services inflation, the resilience of the labor market, loose financial conditions and the management considerations of the ECB of risks”, for PIMCO strategists.
“During the second half of the year, the focus should continue to be on wage developments, particularly in light of a record unemployment rate of 6.4% and a continued high number of ‘vacant jobs.’
On the value side, Forvia lost 5.79%, Maurel and Prom 5.60%, TechnipEnergies 4.40%, and Valeo 3.44%, for all securities with a strong Beta effect currently.
On the other side of the Atlantic, the main equity indices finished slightly higher, such as the Dow Jones (+0.36%) and the Nasdaq Composite (+0.17%). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.15% to 5,291 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 $1.0870. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $73.00.
On the agenda this Wednesday, to follow as a priority the final PMI services data in the Euro Zone (synthetic data at 10:00 a.m.), the ISM services at 1600 across the Atlantic and above all, the survey by the private firm ADP at 2:15 p.m.
KEY GRAPHIC ELEMENTS
Major technical event Wednesday May 29: the breaking of the lower limit of a bullish channel, in conditions of significant volatility and volumes. The ebb movement takes on meaning, and the next bearish stage is materialized by the gap of February 22, set to be filled, and whose lower limit is worth 7,821 points. Note that the candle, in marubozu Wednesday 29/05, illustrated the continued mobilization of the seller camp throughout the session. Closing at the low points of this session calls for the greatest caution in the short term. This candle followed a bearish encompassing combination.
A shoulder, head, and shoulder figure begins to appear.
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 8000.00 points.
News Bulletin 247 advice
Hourly graph
Daily Data Chart
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
