CAC 40: Wall Street catches its breath

(News Bulletin 247) – First session of consolidation for global indices after a powerful rebound in recent days. Investors are waiting for the Fed’s minutes to be published this evening at 8:00 p.m. French time. As a reminder, the Fed’s minutes are a detailed report of the discussions and decisions taken during the meetings of the Federal Open Market Committee (FOMC). These meetings are held approximately eight times a year and concern the monetary policy of the United States, in particular interest rates. The minutes are published three weeks after each meeting, which allows investors and analysts to better understand the intentions and concerns of the Fed members. While the minutes should not surprise investors, they will be attentive to the slightest signal that allows them to detect in advance the speech by Jerome Powell expected later this week. Investors will therefore turn after the Fed’s minutes to a highly anticipated speech by Fed Chairman Jerome Powell at the Jackson Hole symposium on Friday, where he should give clues on the path to follow for US interest rates. Investors are pricing in three- to four-quarter-point rate cuts from the Fed by year-end after strong retail sales data restored confidence that an imminent recession is likely to be avoided. In the US presidential race, Nicole Shanahan, Robert F. Kennedy Jr.’s running mate in the 2024 presidential election, said her campaign was considering withdrawing from the race to “join forces” with Republican candidate Donald Trump. On the geopolitical front, US Secretary of State Antony Blinken left the Middle East yesterday without an agreement on a ceasefire in the Gaza Strip having been reached between Israel and Hamas. This news has allowed oil to stabilize but has not revived concerns about supply. Moreover, investors will be watching this afternoon for the publication of US crude oil inventories at 4:30 p.m. French time. On Wednesday’s microeconomic front, Walmart is expected to lead the day after news of a sale of its stake in JD.com. Walmart is looking to raise up to $3.74 billion by selling its stake. Walmart plans to sell its stake in JD.com at a price between $24.85 and $25.85 per share. In addition, there are a number of news releases expected today, including The TJX Companies, Analog Devices, Synopsys, Target Corporation, Snowflake, Zoom Video and Nordson Corporation.

Technical Review: The Paris index is still in its rebound phase but is now facing a dynamic resistance level, namely the descending 50-period moving average. In addition, the index did not manage to exceed the bearish gap at the close, which acts as resistance, demonstrating that sellers are defending this level. Thus, it will be relevant to position oneself for sale as close as possible to this bearish moving average in order to aim for a return to the daily 20-period moving average.

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.

Hourly data chart

Daily data chart