CAC 40: Between two terminals

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In relatively reduced activity, due to Columbus Day (non-working on Wall Street), the Parisian market will have gained only 0.32% to 7,602 points for the first session of the week. A session marked by the decline of luxury groups, penalized by the absence of details on the announcements of new measures from China. On the CAC 40, Hermès lost 0.42%, L’Oréal 0.77%; LVMH 2.34% and Kering, the red lantern 3.83%.

A lot of circumspection, therefore, in the trading rooms, a fringe of which fears a no-landing type scenario for the American economy.

As a reminder, published last week, the CPI (Consumer Price Index) increased by 2.4% in September, at an annualized rate, in the broadest basket of products, where the consensus predicted an increase of 2 .3%. Enough to further underline, after the very muscular September employment report, the impressive resilience of the American economy after such long months of high rates.

Operators, who will begin the season of quarterly publications, will also deal with the outcome of the Council of Governors of the European Central Bank on Thursday.

“The European Central Bank (ECB) will again lower its key rate by 25 basis points this Thursday. That’s a certainty. In an ideal world, it would take inspiration from the Federal Reserve and lower it by 50 basis points. base While Germany is in recession, the European manufacturing industry is collapsing, and energy prices are four times higher in Europe than on the other side of the Atlantic, the ECB. is concerned about a possible price-wage loop in the services sector which has struggled to materialize since the start of the year”, analyzes Christopher Dembik, investment strategy advisor at Pictet AM.

On the values ​​side, as we have seen, luxury was penalized, defense was surrounded, while the Lebanese Hezbollah on Monday threatened Israel with new attacks if its offensive in Lebanon continued, according to AFP. Tensions are also rising a notch in the China Sea. The Chinese army launched a new series of military maneuvers near Taiwan on Monday. Thales occupies the largest increase in the CAC 40, and climbs 1.1%. Equivalent performance for Dassault Aviations, the designer of the Rafale.

On the other side of the Atlantic, the main equity indices rose on Monday, such as the Dow Jones (+0.47%) and the Nasdaq Composite (+0.87%). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.77% to 5,859 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 $1.0890. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $70.60.

On the macroeconomic agenda this Tuesday, to follow as a priority the ZEW index of confidence in the German economy as well as industrial production in the Euro Zone, at 11:00 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 identified, our opinion is neutral on the CAC 40 index in the short term.

We will take care to note that crossing 7690.00 points would revive the buying tension. While a break of 7465.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart