CAC 40: Trump euphorizes Wall Street, Europe questions itself

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Monday, a public holiday (November 11, 1918 armistice), the Paris Stock Exchange was open and trading, in fact reduced, allowed the CAC 40 to recover 1.20% to 7,426 points, with the support of industrial stocks , like Michelin (+2.52%), Safran (+2.59%), Schneider Electric (+3.34%), or Saint Gobain (+3.48%) supported by Jefferies.

If Europe is still gauging the direct and indirect implications of Trump’s international and customs policies, Wall Street, for its part, is setting records. The S&P500 even managed to close on Monday above the symbolic threshold of 6,000 points.

“For Europe, the return of Donald Trump to the White House represents considerable commercial and geopolitical uncertaintywhich will have a negative impact on growth in Europe”, warns Dr. Felix Schmidt – senior economist and Dr. Holger Schmieding – chief economist at Berenberg. “We expect that Trump will initially only impose tariffs chosen and punctual customs duties, while threatening China and Europe with a new escalation in the trade war if they do not make concessions. This approach would be comparable to the one he took in 2017-2020.”

In terms of statistics, there is nothing to sink your teeth into on Monday, at the dawn of a week that is nevertheless rich in this regard. Operators will be able to see consumer prices in the United States tomorrow, as well as retail sales on Friday. As of this Tuesday, it is the closely followed ZEW index of confidence in the German economy, the largest economy in the Euro Zone, which concentrates distressing questions.

On the other side of the Atlantic, session records multiplied on the main stock indices, such as the Dow Jones (+0.69% to 44,293 points) and the Nasdaq Composite (+ 0.06% to 19,298 points). The S&P500, the reference barometer of risk appetite in the eyes of fund managers, gained 0.10% at the close, sufficient however to close above the symbolic threshold of 6,000 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 $1.0700. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $70.20.

On the macroeconomic agenda this Tuesday, follow the German ZEW at 11:00 a.m.

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. On the scale of the single session to come, the pursuit of a pullback of the 7,645 points is considered.

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.

Hourly graph

Daily Data Chart