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Rebound without much conviction yesterday on the Paris Stock Exchange where the flagship equity index, the CAC 40, gained 0.76% to 7,628 points, in volumes even lower than those of the day before, hampering the construction of a rebound solid technique. And in terms of volumes this Wednesday, participation should remain limited, due to the absence of the Wall Street compass, closed for a public holiday. It is Juneteenth, a national holiday since June 2021, June 19 symbolizes the emancipation of African-American slaves in the South (Confederate States).
The market, as a whole, remains upset since the announcement of the dissolution of the National Assembly by Emmanuel Macron following the results of the European elections. Enough to plunge the financial community into doubt as to the potential impacts of a change of majority (or an absence of majority) on the public finances of the second economic power in the Euro Zone.
“At this stage, investors are immersed in uncertainty. It must be said that none of the possible scenarios currently seems favorable to the financial markets. Indeed, while the trend in French public finances was already not particularly bright, the “The prospect of particularly wasteful programs at both extremes raises fears of the worst for French debt”, explains Thomas Giudici, head of bond management at Auris Gestion.
“It is therefore no longer surprising to now see France borrowing more expensively than Portugal and closer to Greece or Italy than to Germany,” notes the manager bitterly. “Will France, a new peripheral country, join the club of weak countries in the euro zone (PIIGS: Portugal, Italy, Ireland, Greece and Spain)? Our chauvinism is taking a hit…”
In terms of statistics, operators took note of the monthly dynamics of retail sales, below expectations for the month of May, which allows 10-year Treasury bonds to continue their decline below 4.25%. Conversely, industrial production jumped 0.9%, well beyond expectations in the United States in May.
In the values “ray”, Carrefour lost 4.3% after dropping more than 9% during the session, hitting a November 2020 low. The stock suffered following several press articles reporting that Bercy put pressure on the distributor to amend its franchise model. According to these articles, the Ministry of the Economy would demand a fine of 200 million euros against Carrefour. The banks, battered last week, are unable to develop a consistent rebound in protest, like Société Générale (+0.09%), Crédit Agricole (+0.46%) and BNP-Paribas (+0). .54%).
On the other side of the Atlantic, the main equity indices finished at levels close to equilibrium, but symbolically in the green, on the eve of a non-working public holiday. The Dow Jones and the Nasdaq Composite gained 0.15% and 0.03% respectively. The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, is now moving almost 500 points above the 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 $1.0740. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $80.70.
On the agenda this Wednesday, the NAHB index of the American residential real estate market at 12:00 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 on 06/11 during the session. The short-term graphic configuration is significantly degraded.
In quick succession, the flagship tricolor index failed two major technical tests: it exited the bottom of a channel on May 29, and as seen previously, it exited the bottom of a chart pattern on June 10. Below 7,900 points, the situation remains worrying.
The “LVMH” gap has been filled. Ample, it was formed on January 26 following the publication of an excellent quarterly report from the luxury giant.
The weekly candle of week 24 testifies to a strong and continuous mobilization of the selling camp throughout the unit of time.
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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