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It should be noted as a preamble that despite the public holiday nature of this Thursday (Assumption), the Paris Stock Exchange is opening, under normal conditions of hours and quotation. Among the major stock exchanges, only Milan will be missing.
Yesterday, Wednesday, the CAC 40 index got a bit of breathing room, closing up 0.79% at 7,333, in volumes still as low as the summer trough, thanks to US inflation figures in line with analysts’ expectations. And this comes the day after producer prices were also reassuring. Over a year, consumer prices even came out slightly below expectations.
In detail in July, American consumer prices increased by 2.9% over one year, after 3% in June. They are back to their lowest level since March 2021, and this slowdown is greater than expectations, since economists surveyed by the Wall Street Journal were expecting a figure of 3% over one year. Over one month, inflation rose to 0.2% in line with expectations. “Core” inflation, i.e. excluding food and energy prices, is also in line with the consensus at 3.2%, according to data from the Bureau of Labor Statistics. And it is above all a little less than the 3.3% in June.
In terms of values, cyclical stocks were popular on Wednesday, such as Forvia (+1.53%), Schneider Electric (+1.61%), Eramet (+1.72%), Imerys (+1.93%), or Nexans (+2.38%), while fears of the American economy entering a recession are fading.
On the other side of the Atlantic, the main stock indices ended Wednesday’s session in the green, but within very narrow margins, such as the Dow Jones (+0.61%, crossing the 40,000 point mark) or the Nasdaq Composite (+0.03% to 17,192 points). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.38% to 5,455 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 $1,1010. The barrel of WTI, one of the barometers of risk appetite on financial markets, was trading around $76.10.
On the agenda this Thursday, to be followed as a priority, across the Atlantic, are retail sales, unemployment benefit registrations, the Empire State and Philly Fed manufacturing indices at 2:30 p.m., and the monthly industry report at 3:15 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.
This level of 7,465 points corresponds to the lower limit of a former gap (26/01). At the time, LVMH excited the market with a quarterly copy of excellent quality. Market which is in a completely different psychological disposition this summer.
On Wednesday, July 31, the index completely filled the downward gap of July 24, bringing additional heaviness to the short-term configuration. On Thursday, August 1, it broke again the 7,465 points, with closing on the low points of the session, triggering the formation of a new bearish leg. This leg is in full expression phase.
The timid reaction of Wednesday 07/08 should give way, due to lack of conviction, to a continuation of the clearances. It will be essential to observe, in addition to the volumes, the participation of this or that sector in the decline. The very clear price/volume divergence in week 32 is cause for concern.
On the scale of the upcoming session, however, a continuation of the buying reaction is expected.
FORECAST
Considering the key graphic factors that we have mentioned, our opinion is positive on the CAC 40 index in the short term.
This bullish scenario is valid as long as the CAC 40 index is trading above the support at 7200.00 points.
The News Bulletin 247 council
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