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The CAC 40 index managed to rebound on Thursday, at the heart of the technical working base of 7,200/7,340 points, without however suggesting any new short-term directionality. The pre-opening this Friday already suggests some red, while Wall Street took the hit, after an intervention by J Powell, Head of the Fed, during an event organized at the federal branch of the Dallas Fed. Based on the very good health of the American economy, he explained that a rapid rate cut was not justified, and that there was no urgency in the ongoing monetary easing process. A tone judged less dovishif not more hawkish than expected.
In the process, and according to the CME Group’s FedWatch tool, the probability of a monetary status quo at the end of the next FOMC jumped to 37.4%. The American 10-year, for its part, continues to simmer in the immediate vicinity of 4.45%.
On Thursday, operators focused on producer prices in the United States, without any deviation from the consensus, regardless of the basket of products chosen. Furthermore, the low weekly registrations for unemployment benefits, still close to 200,000 new units, show the iron health of American employment, health mechanically with an inflationary tendency. This PPI index contains elements which feed into the PCE inflation index, deemed to be the most favored by the American Federal Reserve (Fed) to gauge price developments in the United States, comments Ipek Ozkardeskaya, Swissquote analyst. Bank, cited by AFP. However, PCE prices are by far THE Fed’s preferred measure in its assessment of price dynamics.
As a reminder the day before, operators composed with knowledge of consumer prices (CPI) for the month of October. On an annual basis, for the broadest basket of products, the price increase reached 2.6%, i.e. inflation in line with expectations, up significantly compared to September (+2.4%). On a monthly basis, excluding food and energy, the increase reached 0.3%.
A little earlier today, the market took note of the second estimate of gross domestic product in the euro zone, with an increase confirmed at 0.4%. This improvement in the economic situation is “unlikely to be lasting”, however, predicts Capital Economics.
On the values ​​side, Kering finished at the top of the CAC 40 (3.97%). The title of the luxury group was able to benefit from announcements from Burberry which for its part soared by almost 19% after unveiling this Thursday a new strategy to reignite the desirability of its brand. Kering is followed by Arcelormittal (+3.9%), which was supported by an increase in purchasing advice by Bank of America.
Excluding the flagship index, Alstom rebounded by 12.2% after reassuring itself about its cash generation in the first half of its 2024-2025 financial year. The reinsurer Scor advanced 9.7%. During its quarterly results, the group reported a solvency ratio that was now high enough to secure the dividend. The company has also completed the review of its assumptions for its life and health reinsurance branch, with an impact less strong than feared by the market. Eiffage grew by 2.1%, the construction and concessions group delivered revenues above expectations in the third quarter, driven by the good dynamics of its energy division.
Conversely, Casino plunged by 17.80%, after the publication of its roadmap for 2028.
On the other side of the Atlantic, the main equity indices confirmed their need for breathing space, like the Dow Jones (-0.47%) or the Nasdaq Composite (-0.64%). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, contracted by 0.60% to 5,949 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 $1.0550. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $67.70.
On the macroeconomic agenda this Friday, to follow as a priority, across the Atlantic, retail sales and the Empire State index at 2:30 p.m., as well as the monthly report on the industry at 3:15 p.m.
KEY GRAPHIC ELEMENTS
With a candle with a long red body on Tuesday, November 12, the index defined the amplitude of a new working base, between 7,200 points on the one hand and 7,340 points on the other hand, which we switch to chart resistance zone. The thick volumes of this key session, combined with the opening gap, give meaning to the threshold break.
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 7340.00 points.
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