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The CAC 40 index rebounded sharply on Friday in the wake of very solid figures on American employment, showing impressive resilience. This rebound of 0.85% must however be compared with an overall loss of 3.21% over the whole week, against a backdrop of fear of escalating geopolitical tensions in the Middle East.
Concerning the highly anticipated NFP (Non Farm Payrolls) report, the unemployment rate first of all, expected stable at 4.2% of the active population, is down to 4.1%. Job creation in the private sector (excluding agriculture) exploded to 254,000, against a consensus of 147,000 (!). Finally, average hourly wages increased by 0.4%, extending the trend from August (+0.5%). Figures which show great resilience in private employment, and which could theoretically push back expectations of a rate cut.
“Given the strength of the labor market highlighted by the September jobs report, the real debate within the Fed should be over whether to ease monetary policy. Hopes for a reduction of 50 basis points (0.5 percentage points) are long gone. We continue to believe the Fed will take a more measured approach, cutting rates by 25 basis points (0.25 percentage points) each time. meeting until the policy rate is between 3.00% and 3.25%,” says Paul Ashworth of Capital Economics.
Enough to revive speculation on the level of “softness” of the landing of the world’s largest economy.
On the thorny geopolitical front, on Thursday, US President Joe Bien indicated that Israel could attack Iran’s oil infrastructure. This clearly boosted oil prices. “Undoubtedly, this rise in the price of oil and the growing tensions in the Middle East have affected risk-taking in the markets. Nevertheless, the market remains focused on the evolution of growth and inflation in the major countries , in particular because of their impact on monetary policies”, explains Sebastian Paris Horvitz, of La Banque Postale AM.
In the securities department, Ubisoft ended up sharply up 33.5%, awakened by information from Bloomberg according to which the Guillemot family is considering several options to stabilize the company, including a delisting, that is to say a buyout. of the company, alongside Tencent. Elis rebounded by 10%, after announcing in the afternoon that it had ended its discussions with Vestis and Unifirst with a view to a potential merger. This relieves investors, who feared fundraising to finance these potential acquisitions.
On the other side of the Atlantic, the main equity indices ended Friday’s session in the green, mainly on gap after the employment figures, like the Dow Jones (+0.81%) and the Nasdaq Composite (+1.22%). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.90% to 5,751 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 $1.0960. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $73.80.
On the macroeconomic agenda this Monday, to follow as a priority the Sentix index of investor confidence in the Euro Zone at 10:30 a.m.
KEY GRAPHIC ELEMENTS
The nervous oscillations will continue to be concentrated between two major levels, the 7,465 / 7,500 points on the one hand, and the 7,690 / 7,700 points on the other. A quotation band from which an exit would release additional energy. But in the immediate future, contrary movements, in a clear direction, are expected.
FORECAST
Considering the key graphical 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 above support at 7465.00 points.
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