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From its fragile base of technical support at 7,340 points, the CAC 40 (+0.76% to 7,425 points) started to rise again on Thursday, the day after the election of D Trump as President of the United States. United. This is certainly less than the DAX, but it is still significant as the market continues to assess the repercussions of Donald Trump’s return to the White House next January.
“Trump remains unpredictable”, note Dr. Felix Schmidt – senior economist and Dr. Holger Schmieding – chief economist at Berenberg. “It is therefore very difficult to predict which of his almost innumerable and not always coherent electoral promises will actually be implemented. But unlike 2016, the electoral success of Trump and his team is not a surprise. advisors are prepared, so he will in all likelihood be able to implement decisions much more quickly and effectively than when he first took office eight years ago.”
In the immediate future, the main fears remain inflationary, trade, customs and geopolitical. We will have plenty of time to return to this during our next analyses.
On the question of inflation in particular, all eyes are focused on the dial of the American 10-year, whose needle is panicking.
“One of Trump’s recent proposals is to “remove taxes and replace federal revenues with tariffs.” Although difficult to achieve, this measure reflects a desire to pursue an expansionist and protectionist monetary and fiscal policy. This would lead to pressure inflationary, thus pushing rates upwards”, analyzes Grégoire KOUNOWSKI, Investment Advisor at Norman K.
The Fed, which yesterday concluded a new meeting of its Monetary Policy Committee, unsurprisingly lowered the remuneration of its Fed Funds by 25 basis points, and suggested that the process of monetary easing would continue, but the whole question of the rate of decline to come is now being asked.
On a statistical level, weekly registrations for unemployment benefits stood at 221,000 new units, very close to the consensus, and synonymous with chronic firmness in employment across the Atlantic. A dial that the Fed consults very regularly.
On the value side, unsurprisingly, it is the high Beta files, which had suffered the most the day before, which found the most color, like Remy Cointreau (+4.81%), Valeo (+5, 45%); Wordline (+5.70% or Forvia (+7.78%). Conversely, Air France, has – if you give me the image – crossed an air gap, plunging by 10.50%, disappointing the financial community after the Olympic period.
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 $1.0770. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $71.70.
On the macroeconomic agenda this Friday, priority should be given to preliminary data from the consumer confidence index (U-Mich) at 4:00 p.m.
Please note that on Monday, November 11, a public holiday, the Paris Stock Exchange will be open, under usual opening and trading conditions.
KEY GRAPHIC ELEMENTS
The 7,465/7500 points gave way on Wednesday 30/10, on gap, in thick volumes, and in conditions of notable volatility. The short-term bearish message is thus mechanically validated. The next identifiable level is 7,340 points.
Note that Friday’s session will have “saved” the appearance of the weekly candle, but that the new floor of 7,340 points is weakened. The ultra-volatile session of Wednesday November 6 will have further weakened this level, which was hit very precisely.
Caution, therefore, in a market environment dominated by nervousness.
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 7465.00 points would revive the buying tension. While a break of 7340.00 points would restart the selling pressure.
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