CAC 40: One eye on the barrel, the other on the American 10-year

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Our national CAC 40 opened in the green and ended in the red on Tuesday, dropping 0.61% to 7,511 points at the end of another volatile session, marked by renewed nervousness as the quarterly approaches GAFAM and the outcome of the American presidential election.

“The Republican’s campaign is enjoying real momentum,” notes Christopher Dembik, investment strategy advisor at Pictet AM. “The polls are tighter than ever, which generally tends to give him the advantage, as he has been underestimated in the past. The vice presidential debate was an excellent performance for JD Vance, allaying some concerns on this choice. There was Musk, obviously. Trump’s performance at Macdonald also works very well in terms of image. His campaign is responsive, rapid, and relies on humor, which contributes to the image. humanize”, analyzes the strategist.

Operators were once again able to take stock of the impressive resilience of the American economy, taking note of the surge, well beyond expectations, in the consumer confidence index (Conference Board). The index rose sharply to 108.7 points, in the land of supreme consumption! Enough to further heat up the American 10-year, which reached 4.30% at its highest since July 9.

On the value side this Tuesday, Vusiongroup limited its decline to 3.8% after revealing activity lower than expectations in the third quarter. Conversely, SMCP jumped 8.4% as the company reported a slight improvement in its dynamics from one quarter to the next. Oddo BHF describes this publication as “correct”. Excluding company publications, Beneteau (+8.2%) and Trigano (+2.8%) accelerated upwards after the decision of the Competition Authority to validate the takeover of the mobile homes activity of Beneteau by the leisure vehicle specialist, and “without conditions”.

On the other side of the Atlantic, the main equity indices ended Tuesday’s session in scattered order, like the Dow Jones (-0.36%) and the Nasdaq Composite (+0.78%). . The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.16% to 5,832 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 $1.0820. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $67.60.

On the macroeconomic agenda this Wednesday, to follow as a priority the results of the survey by the private firm ADP at 1:15 p.m., as a preview of the federal employment report on Friday. Also to be followed, tomorrow, at 1:30 p.m., the very first estimates of American GDP in Q3.

Note that the East Coast of the United States has not in turn switched to winter time, the opening of Wall will take place, in the meantime, at 2:30 p.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 still expected. The 7,500 points were under more pressure last week, a risk for the flagship index, which made a foray below on Wednesday October 16 before recovering significantly during the session. New test on October 22, then on the 23rd and 25th, with low wicks on the corresponding candles.

Finally, the so-called bearish engulfing school candle combination, formed on October 29, darkens the technical picture in the very short term.

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