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The CAC 40 managed to end Wednesday’s session symbolically in the green (+0.26% to 7,384 points), preserving the technical threshold of 7,340 points, as the end of the last FOMC of the year. This meeting of the Fed’s Monetary Policy Committee resulted, unsurprisingly, in a 25 basis point reduction in the remuneration of the Fed Funds.
But the powerful central bank also published an update of its economic projections, highlighting the great strength of the labor market. The Fed suggests that it could only lower rates by 50 basis points cumulatively over the whole of next year. Enough to cause a sharp ebb on Wall Street (see below).
On the values ​​side, Renault (+5.21%) dominated the debates, in the wake of ongoing discussions between Nissan and Honda, on a possible merger, which would have several virtues for the diamond manufacturer. On the other side of the chart, Pernod-Ricard lost more than 3%. The spirits group’s shares have plunged by almost 30% since the start of the year, in a very difficult context for this export sector.
On the smallcaps side, Theranexus (+32.37%) announced a licensing agreement with the Spanish group InsudPharma, which will notably trigger an initial payment of 2 million euros. By accounting for other flows to come soon, Theranexus has extended financial visibility until the end of March 2026.
On the other side of the Atlantic, the main equity indices fell sharply, like the Dow Jones (-2.58%) and especially the Nasdaq Composite (-3.56%). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, depreciated by 2.95% to 5,872 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 $1.0390. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $69.70.
On the macroeconomic agenda this Thursday, to follow as a priority across the Atlantic the final GDP data, weekly registrations for unemployment benefits and the Philly Fed, at 2:30 p.m.
KEY GRAPHIC ELEMENTS
The flagship tricolor index will have traveled 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.
The 7,340 points are already under pressure. A clean break would quickly return the index to 7,200 points. A significantly lower opening is expected this Thursday, the day after the publication of the Fed’s quarterly economic projections.
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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