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Weighed down by the automobile sector, the Paris market ended the session in the red (-0.24% at 7,407 points for the CAC 40 index), on the eve of the publication of key figures on American inflation.
On the sectoral side, it is therefore the automobile sector (including equipment manufacturers) which weighed down the market, following a lowering of forecasts by the German BMW, following a problem with a brake system. A “black swan” for the manufacturer, which nevertheless had a “spillover” effect on the sector. Stellantis lost 3.02%, Renault 3.10%, Forvia 3.85%, Valeo 4.35% and OPMobility 5.18%.
The leading Parisian index limited the damage, however, thanks to Capgemini, which posted the biggest increase (+5.3%), thanks to an upgrade of its buy recommendation from Bank of America and the good results from the American group Oracle published on Monday evening. Another tech stock, Dassault Systèmes, rose by 1.8%, in the wake of Capgemini.
As for the American inflation figure that will be published today, it concerns consumer prices (CPI), expected to slow down very significantly to 2.5% at an annual rate, in the broadest product base. A figure that will be followed all the more closely because it will support the scenarios of a 25 or 50 basis point decline at the end of the next FOMC on September 18.
“If a 25 bps cut in key rates seems to be a given (a first since the plateau reached over a year ago), is it possible that the latest economic data will allow the American institution to proceed with a 50 bps cut?” asks Thomas Giudici, who considers that “the latest employment data are not bad enough to justify an overreaction by the Fed even though they confirm the slowdown in the labor market.”
On Friday, the monthly report on private employment in the United States, without being catastrophic, revived doubts, to the point of weighing heavily on Wall Street, more particularly on the technological side of the stock market.
Because if the unemployment rate remains stable at 4.2% of the active population, the number of job creations in the private sector (excluding agriculture) comes to 142,000, well below the target. So, of course, the result is not as bad as in July (114,000), but it rekindles the debate on the nature of the landing of the American economy. In other words, the soft landing, and a fortiori the kiss landing, is no longer so relevant. Finally, the average hourly wage, at +0.4%, exceeds the consensus.
Finally, let us note that the market remains completely cold in the face of Michel Barnier’s appointment to Matignon. The former minister of François Mitterrand, Jacques Chirac and Nicolas Sarkozy, former European Commissioner, succeeds Gabriel Attal. The septuagenarian will have to demonstrate his negotiating skills – let us recall that he was in charge of Brexit negotiations in Brussels – to form his government first, then get down to drawing up a budget for France.
On the other side of the Atlantic, the main stock indices ended in a scattered order, far from their session lows with the easing of rates, like the Dow Jones (-0.23%) and the Nasdaq Composite (+0.84%). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, nibbled 0.45% to the immediate vicinity of 5,500 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 $1,1050. The barrel of WTI, one of the barometers of risk appetite on financial markets, was trading around $65.90.
On the agenda this Wednesday, follow the publication of consumer prices across the Atlantic at 2:30 p.m.
KEY GRAPHIC ELEMENTS
The key short-term chart levels were precisely hit: Friday, August 30 at 7,645 points, followed by a failure; and Wednesday, September 4 at 7,482 points, a handful of points from the 7,465 points below which a new bearish leg would form. This last level experienced a first alert on Thursday, September 5.
The fact that the leading French index ended at the lowest level of week 36, just after breaking the threshold, is decisive. It sends a message of short-term weakness.
The key threshold to watch is 7,465 points, below which the opinion will remain negative.
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 7465.00 points.
The News Bulletin 247 council
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