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Without much conviction on Thursday, the CAC 40 attempted a protest rebound on Thursday, fully retracing the losses of the single session on Friday June 14. A rebound led by technology, luxury and banking. Cap Gemini thus gained 3.03%, Kering 2.45% and BNP-Paribas 2.38%.
The market remains very upset by the lack of visibility, at this stage, on the color and composition of the next government, and the positioning of the center of gravity of the hemicycle.
“Fears which relate to the programs of the political blocs which are trying to form themselves…or which have just been formed”, explains Alexandre Baradez (IG France). “Fears relating to the trajectory of the debt but also to questions of regulatory change and taxation.”
The market fears that populist groups, such as the National Rally, will implement policies that would weaken France’s already shaky public finances.
“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…”
The news was dense on the monetary policy side on Thursday, since no less than 3 central banks on the old continent delivered a verdict.
The Swiss National Bank (SNB) has decided to lower its rates for a second time since the start of the year, bringing its main key rate to 1.25%.
This measure was “probably more influenced by the appreciation of the franc over the last two months than by a perceived easing of domestic inflationary pressures”, underlines Capital Economics. “In our view, the SNB is unlikely to cut rates further this year, as domestic demand is already starting to recover and inflation will remain at its current level,” the think tank adds.
The Central Bank of Norway has opted for the status quo, maintaining its key rates at 4.5% and plans to leave them unchanged until the end of the year.
Ditto for the Bank of England which, unsurprisingly, maintained its interest rates at 5.25%. “We therefore remain committed to our long-standing position of an initial cut of 25 basis points on August 1, followed by a quarterly cut until rates fall to 3.50% at the start of the year. year 2026”, estimate for their part the economists at Nomura.
In terms of statistics, the figures published Thursday, as a whole, were more likely to encourage a cooling of government bond yields, whether the Philly Fed index (1.3) or building permits (1.39M). . Weekly registrations for unemployment benefits, on the other hand, at 238,000 new units, remain very close to the target. The calendar will expand this Friday with a battery of PMI activity indicators, on both sides of the Atlantic.
In the values department, Danone limits its decline to 2.6% after losing up to 4.7% during the session. The agri-food group was sanctioned after unveiling the new part, for 2025-2028, of its Renew strategic plan. But the announced objectives do not seem to have any particular flavor for investors. Bic plunged 12.3%. The specialist in stationery, razors and lighters has lowered its growth forecast for 2024 due to a more difficult US lighter market than initially expected.
On the other side of the Atlantic, the main equity indices ended the session in mixed order, like the Dow Jones (+0.77%) and the Nasdaq Composite (-0.79%). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, contracted by only 0.25%, to 5,473 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 $1.0720. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $81.20.
On the agenda this Friday, to follow as a priority the PMI (industry and services), in preliminary data for the current month, at 10:00 a.m. for the Euro Zone and at 3:45 p.m. for the United States. A quarter of an hour later, sales of old homes across the Atlantic will be published.
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.
Week 25 is the scene of a timid, half-hearted reaction.
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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