CAC 40: Congestion between 7,200 and 7,340 points

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In the absence of major macroeconomic statistics on Monday, the CAC 40 (+0.12% to 7,278 points) in discreet volumes experienced a transition session, at the heart of its new working band, between 7,200 points (support fragile) and 7,340 points (solid resistance). Investors digested last week’s solid US statistics, causing the Fed’s tone to strengthen.

The markets notably took note of a new battery of American statistics on Friday afternoon, including retail sales for the month of October. A key measure of American consumer sentiment, they increased by 0.4% compared to September, and thus slightly exceeded the expectations of economists (+0.3%). The September figures were revised upwards, with an increase of 0.8% against an initial forecast of 0.4%. Furthermore, the “Empire State” index, the NY Fed’s manufacturing index, for its part exploded expectations, jumping from -11.9 to 31.2 points.

This insolent health, combined with “inflationary” expectations across the Atlantic – naturally linked very directly to the expansionist policy of President-elect Donald Trump – are straining the interest rate markets. “Trump’s victory should lead to a reduction in corporate taxes which should allow them to innovate and have comfortable margins,” for Christopher Dembik, investment strategy advisor at Pictet AM, who thinks about inverse “that the growth in earnings per share of 9% next year expected for CAC 40 companies is…optimistic in view of the risks linked to China and the trade war.”

Furthermore, investors are awaiting Donald Trump’s next appointments. On Friday, that of the future Secretary of Health, vaccine skeptic Robert Francis Kennedy Jr, caused pharmaceutical groups to fall. “Potential political appointments for the new Trump administration are in the news, with the Treasury secretary position attracting the most interest, with a lot of jockeying over the weekend between those who are perceived as the main candidates, namely Scott Bessent and Howard Lutnick”, explains Deutsche Bank. Scott Bessent is a former collaborator of the famous investor George Soros while Howard Lutnick is the managing director of the investment bank Cantor Fitzgerald.

On the values ​​side, Vivendi lost 1.7% after presenting the medium-term outlook for Canal+, which held a day dedicated to investors this Monday in view of its next independent listing on the Paris Stock Exchange.

On the other side of the Atlantic, the main equity indices ended in mixed order, with the Dow Jones contracting by 0.13% and the Nasdaq Composite, with a strong technological coloring, gaining 0.60% with the support of Tesla. The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, ended very slightly up 0.39% at 5,893 points.

An update on other risky asset classes: around 8:00 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0590. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $69.20.

On the macroeconomic agenda this Tuesday, to follow as a priority consumer prices in the Euro Zone (final data for October) and housing starts and building permits across the Atlantic, at 2:30 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 identified, our opinion is neutral on the CAC 40 index in the short term.

We will take care to note that crossing 7340.00 points would revive the buying tension. While a break of 7200.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart