CAC 40: The Chinese stock market plunges again after a public holiday week

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Digesting the latest strong figures on American employment, and keeping a worried eye on the geopolitical situation in the Middle East, operators showed little initiative on Monday, at the dawn of a week which will be much poorer in economic statistics than the previous one. Microeconomics should, however, gradually attract attention, culminating on Friday with the quarterly publication of many American banking groups. Testing the solidity of the banking fabric across the Atlantic, an essential step after the clear conclusion of recent weeks: the American economy is showing impressive resilience after so many months of high rates. The NFP report (Non Farm Payrolls) published on Friday illustrated it wonderfully.

As a reminder, the unemployment rate first of all, expected to be 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. The market preferred to see the glass half full, reassuring itself about the capacity of the American economy to land softly, or even… not to land at all (no landing).

“We continue to think, for example, that the United States will experience a soft landing,” agree Erik L. Knutzen and Jeff Blzak, co-CIOs – Multi-Asset of Neuberger Berman.

“However, we also know that the deterioration of the Israeli-Iranian conflict, a rapidly evolving situation, could continue to push investors towards oil, gold and safe havens, as was the case last week Our normative baseline for the United States could easily be disrupted by an event such as the US dock workers’ strike, which had threatened to become a market-altering shock in terms of growth, inflation, or both. , continued the decision-makers.

It is therefore in a market with erratic movements which is leading to take place, on the CAC 40, between 7,500 and 7,700 points, two limits that we monitor like milk on the fire. The flagship tricolor index nibbled 0.46% to 7,576 points on Monday.

In terms of statistical figures, there is very little to sink your teeth into. Let us still mention the Sentix investor confidence index in the Euro Zone, which although still clearly in negative territory, rose to -13.8, moderately beating expectations.

In terms of price variations, Totalenergies increased by 1% to 63.28 euros with the help of the dynamics of crude oil prices. Excluding CAC 40, Rubis gained 3.5% after announcing a share buyback program which will cover a maximum of 1 million shares and a ceiling price of 50 euros per share. Bonduelle ended up 1.3%, after announcing its annual results. Finally, Ubisoft consolidated (-3.87%) after Friday’s surge (+33.50%), on speculation of a delisting, through a share buyback from the Guillemot family. and Tencent.

Also note that the very volatile shares in the automotive equipment sector were under strong pressure on Monday, such as OPMobility (-3.52%), Forvia (-4.78%) and Valeo (-5.32). %).

On the other side of the Atlantic, the main equity indices ended the first session of the week in the red, like the Dow Jones (-0.94%) and the Nasdaq 100 (-1.17). %). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 0.96% to 5,696 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 $1.0990. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $75.40.

On the macroeconomic agenda this Tuesday, to follow as a priority the monthly American trade balance at 2:30 p.m.

Note that the MSCI China has just started to fall sharply again (-6.33%), after a public holiday week.

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 negative on the CAC 40 index in the short term.

This bearish scenario is valid as long as the CAC 40 index is below resistance at 7690.00 points.

Hourly graph

Daily Data Chart