CAC 40: The turning point of rigor

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The Parisian market remained restrained on Thursday, welcoming without emotion US inflation figures that were a little higher than expected, and while France’s 2025 budget was presented to the Council of Ministers.

The CPI (Consumer Price Index) was therefore published yesterday, and it was undoubtedly the highlight of the week from a statistical point of view. Retail prices increased by 2.4% in September, at an annualized rate, in the broadest basket of products, where the consensus had predicted an increase of 2.3%. Enough to further underline, after last Friday’s very muscular employment report, the impressive resilience of the American economy after such long months of high rates.

In the process, the Treasuries 10 years, i.e. the yields on Treasury bonds maturing in 10 years, rose even further above 4%. And the odds of seeing the Fed lower its rates by 25 basis points in less than a month rose to nearly 86%, compared to 14% for a more pronounced cut, of 50 basis points.

“This change in the inflation profile was accompanied by an increase in jobless claims, which reached 258,000, the highest level in 14 months. Although this indicator tends to be volatile, this increase “The unexpected introduces a new layer of uncertainty in the economy, especially after September’s strong NFP data, which painted a more favorable picture of the labor market,” notes Quasar Elizundia, Expert Research Strategist at Pepperstone.

“The US economy is showing mixed signals, with a labor market that remains relatively resilient, but with areas of uncertainty and inflation that could prove more persistent than expected. These data reignite the debate between a soft landing , a no-landing scenario and the possibility of a hard landing, even if the latter remains more remote for the moment.”

Furthermore, the Barnier government presented on Thursday the Finance Bill (PLF) for the year 2025. An austerity budget marked by 60 billion in savings or new taxes, mainly targeting the wealthiest.

On the values ​​side, Engie recorded the largest increase (+1.1%) in the CAC 40 while Teleperformance brought up the rear (-2.8%). Airbus gained 0.4% after announcing the delivery of 50 planes in September. Analysts and the market, however, fear that the aircraft manufacturer will be forced to once again lower its delivery target for the 2024 financial year.

On the other side of the Atlantic, the main equity indices ended, even if symbolically, in the red, like the Dow Jones (-0.14%) and the Nasdaq Composite (-0). .05%). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 0.21% to 5,780 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 $1.0940. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $75.10.

On the macroeconomic agenda this Friday, to follow as a priority across the Atlantic, producer prices at 2:30 p.m. and 4:00 p.m., the consumer confidence index (U-Mich), in preliminary data.

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, contrarian 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