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Clearly, the turmoil continues to form in the wake of E’s decision. Macron to dissolve the National Assembly. Speculation is rife about the composition of the future chamber, the color of the government that will be formed, and the level of capacity to carry out reforms. Meanwhile, French debt is in the markets’ sights.
The CAC 40 came close to 2% losses yesterday, at 7,708 closing points, in strong volumes. The whole issue of the session will be to know if the weekly close will merge with the weekly low points. In other words, will we end up at the lowest point of the week? For now, the weekly balance, before the last session, is -3.67%.
And this even though two statistics, which can act as a barometer, as leading indicators of inflation, were rather reassuring: the producer price indices, stable excluding food and energy, as well as new registrations for unemployment benefits, finally moving a little away from the 200,000 mark.
But these figures come too late to influence the American Federal Reserve. On Wednesday evening, the American central bank, as expected, left its rates unchanged following its last monetary policy meeting.
“The Fed is trying to delicately balance the risk of cutting interest rates too soon or too late,” says Xiao Cui, Senior Economist at Pictet Wealth Management.
“For the moment, the labor market is gradually balancing and the thinking is therefore based on inflation. But the Fed is perfectly aware of the bilateral risks weighing on the economy, now that its policy has been restrictive for some time “It also strives to stay ahead of the curve and not wait for things to get worse before cutting rates, hence the asymmetric response to the weak labor market.”
On the values side, Otherwise, the 39 stocks of the CAC 40 closed in the red, notably the automobile manufacturers Stellantis (-2.7%) and Renault (-2.3%). Stellantis also indicated, ahead of its day dedicated to investors, that it intended to increase the share of its results allocated to the payment of the dividend, in 2025. Excluding the CAC 40, Alstom ended down 4.5% after having completed its capital increase of 1 billion euros, thus completing a 2 billion euro debt reduction plan.
On the other side of the Atlantic, the main equity indices finished mixed, with the bank-rich Dow Jones contracting 0.17% to 38,647 points, and the tech-heavy Nasdaq Composite gaining 0.34% to 17,667 points. The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, closed slightly up 0.23% at 5,433 points.
An update on other risky asset classes: around 8:00 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0730. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $77.90.
On the agenda this Friday, to follow in priority the monthly trade balance in the Euro Zone at 11:00 a.m. as well as the preliminary data from the consumer confidence index (U-Mich) at 4:00 p.m.
KEY GRAPHIC ELEMENTS
The shoulder, head and shoulder graphic figure traced since April 16 is in the process of breaking its neckline, which corresponds more or less to the gap of February 22, fully filled yesterday during the session. the short-term graphic configuration is degraded.
In quick succession, the flagship tricolor index failed two major technical tests: it exited from the bottom of a channel on May 29, and as seen previously, it exited from the bottom of a chartist figure on June 10 . Below 7,900 points, the situation remains worrying. And the attraction effect of the wide gap on 01/26 will be felt. At the time, LVMH published a very solid quarter, winning the support of the entire market. Its lower limit is worth 7,466 points.
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 7900.00 points.
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