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The CAC 40 (+0.76% at 7,531 points) continued its reaction on Wednesday, in a market which has regained some activity at the low point of the summer period, with the support of a good series of quarterly results from large groups.
Of the seven companies that published half-year results on Tuesday evening or Wednesday morning, only Safran (-0.9%) showed a decline, with the other six in the green.
L’Oréal gained 2.1% after reporting second-quarter growth that was close to expectations, enough to satisfy a market that may have feared a bigger disappointment.
Airbus jumped 4.8%, thanks to better-than-expected second-quarter results, particularly in terms of cash generation.
Schneider Electric rose 3.1% after raising its margin target for 2024.
The other electrical equipment specialist, Legrand, is not far behind (+6.5%), driven by a rebound in demand for its products for data centers.
But the biggest increase in the CAC 40 was for Teleperformance (10.4%), thanks to an acceleration in its growth in the second quarter that exceeded expectations.
Danone for its part advanced by 2.2% with results judged to be “of good quality” by Oddo BHF in the first half.
In the statistical chapter, investors took note of the inflation figures in the Eurozone, in the sense of consumer prices in preliminary data for the month of July. EuroStat estimates the annual increase in prices at +2.9%, excluding food, energy and tobacco, whereas on average the economists and analysts surveyed were expecting +2.8%..
In addition, the survey by the private human resources firm ADP highlighted job creations in July (122,000) significantly lower than the consensus had suggested. This reinforces the scenario of two federal rate cuts this year, including one in September.
Yesterday, the Fed concluded a meeting of its Federal Open Market Committee (FOMC), a meeting that unsurprisingly ended in a status quo. The monetary institution very clearly opened the door to a first rate cut at the start of the school year, confirming the prevailing sentiment in trading rooms.
On the other side of the Atlantic, the main stock indices ended the session in the green, like the Dow Jones (+0.24%) but especially the Nasdaq Composite (+2.64%), driven by NVidia and the prospects of lower rates. The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, managed to gain 1.58% to 5,522 points.
An update on other risky asset classes: around 8:00 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 risk appetite on financial markets, was trading around $78.20A barrel in sharp rise with the exacerbated geopolitical tensions in the Middle East, but an increase which is capped by the publication this morning by a contraction of industrial activity in China, a first in nine months.
On the agenda this Thursday, to follow as a priority the final PMI data for July this morning in the Eurozone, the weekly unemployment benefit registrations across the Atlantic at 2:30 p.m. and, still on the other side of the Atlantic, the industrial ISM at 4:00 p.m.
KEY GRAPHIC ELEMENTS
The leading index of the Paris market has broken the graphic level of 7,465 / 7,500 points, a floor weakened since June 14. The selling energy released is significant, in light of the inability to fill the opening gap, and in light of the increasing transaction volumes. The message delivered is negative. For the time being, the index remains magnetized by 7,465 points, a level which corresponds to the lower limit of a former gap (01/26). At the time, LVMH excited the market with an excellent quarterly copy. A market which is in a completely different psychological state this summer.
On Wednesday, July 31, the index completely filled the bearish gap of July 24, bringing additional heaviness to the short-term configuration.
FORECAST
Considering the key graphic 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 trading below the resistance at 7690.00 points.
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