CAC 40: The Politburo softens its tone, an entire section of the rating benefits

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Luxury and spirits, sectors particularly exposed to China, fueled the bullish extension of the market on Monday, after a statement from the Politburo. The office of the central committee of the Communist Party declared that it wanted to adopt a “slightly relaxed monetary policy” in 2025 , which, according to Bloomberg, constitutes a first change of tone in this area in 14 years. And augurs new recovery measures to support activity. Remy Cointreau gained 3.97%, Pernod Ricard 2.71%, Kering 3.48% and LVMH 3.52%. Very high Beta stocks in the automotive equipment sector have greatly amplified their benchmark indices, like Valeo (+4.52%) or Forvia (+7.85%).

“We must realize that this is the first major change of position since 2011: the last time this position was adopted was during the period 2008-2010 corresponding to the subprime crisis in the United States. Then, from 2011 to 2024, monetary policy was described as “prudent” by the authorities,” put Alexandre Baradez (IG France) into perspective.

In terms of statistics, the Sentix investor confidence index in the Euro Zone plunged deeper into negative territory at -17.5, compared with a consensus close to the last publication of the indicator, at -12.4. This is the worst score since November 2023, both on the “inventory” component and for the “forecast” component. The only German component “states of affairs” falls suddenly below -50, in the wake of the announcement of new elections to the Bundestag.

It is in this context that a new meeting of the Monetary Policy Committee of the European Central Bank (ECB) will end on Thursday. “The European Central Bank (ECB) is maintaining its policy of lowering rates and is expected to reduce the deposit rate again by 25 basis points, to 3.00%, in December,” anticipates Ulrike Kastens, European Economist at DWS. “

“Markets’ attention should be focused on the new projections until 2027. The deterioration of sentiment indicators could lead to a downward revision of growth forecasts, particularly for 2025 and 2026. This should also be reflected in the forecasts inflation target of 2.0% will be achieved over the period 2025-2027, which, in our view, paves the way for a further reduction in the deposit rate to 2.00%, lower limit of our estimate of the neutral rate.”

To be complete in the values ​​department, Vivendi increased by 1.2% while its shareholders largely approved this Monday afternoon, during a general meeting, the split of the conglomerate into four entities. Publicis limited its gains to 0.4%, while Omnicom confirmed the acquisition of its rival Interpublic to create the world number one in advertising. An operation which should, paradoxically, benefit Publicis.

On the other side of the Atlantic, the main equity indices have begun a consolidation movement, like the Dow Jones (-0.54%) or the Nasdaq Composite (-0.62%). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, contracted by 0.61% to 6,052 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 $67.80.

On the macroeconomic agenda this Tuesday, to follow in priority the NFIB index of American small businesses at 12:00 p.m.

KEY GRAPHIC ELEMENTS

The flagship tricolor index will have covered an old working band, entirely, on Friday 06/12, between 7,340 points and 7,465 points. It is this last level, constituting significant resistance, which will constitute the technical challenge of the week.

The session on Friday, December 6 is important in its construction, the length of the corresponding green candle materializing the definition of a new working framework, also upon crossing the key moving average.

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 7690.00 points would revive the buying tension. While a break of 7340.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart