CAC 40: Technical tank top

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Painful session, Friday at the Paris Stock Exchange, where its flagship index, the CAC 40 began at the high points of the sessions, to end at the low points of the session, around a hundred points lower. Export sectors, particularly exposed to China such as luxury goods or spirits, suffered, under pressure after a disappointing Chinese industrial statistical publication the day before.

Highly exposed to Chinese demand, Stellantis lost 3.50%, LVMH 3.79%, Forvia 4.22%, Kering 4.88% and Remy Cointreau 5.03%.

The manufacturing PMI index calculated by Caixin/S&P Global actually contracted by one point in December, to 50.5 points compared to 51.5 points in November. Which constitutes a disappointment, the market expected an increase to 51.7 points for the past month, but remains above the threshold of 50 points which separates contraction and expansion of activity. China is still struggling with sluggish domestic demand and a crisis-ridden real estate sector.

In terms of statistics on Friday, American operators reacted to better than expected manufacturing activity in December. The ISM manufacturing index (often considered more relevant than the PMI index) stood at 49.3 in December compared to the consensus 48.4 and after 48.5 in November. But for all that, American manufacturing activity continues to deteriorate since the threshold of 50 marks the border which separates contraction and expansion of activity.

On the other side of the Atlantic, the main equity indices have already suddenly retraced the market before, like the Dow Jones (+0.80%) and the Nasdaq Composite (+1.77%). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 1.26% to 5,942 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 $1.0310. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $73.30.

On the macroeconomic agenda this Monday the “Sentix” of investor confidence in the Euro Zone at 10:30 a.m. and the final services PMI data in the monetary union, a little earlier at 10:00 a.m.

KEY GRAPHIC ELEMENTS

In the short term, the “play” produced by the index in contact with an old gap (19/12) has little meaning given the volumes observed. We are neither opting for a clear ebb under this gap, nor for emancipation. The index actually behaves as if it had not filled this gap, and that this zone was a work zone of some kind. Neutral opinion proposed for the upcoming session. The significant levels remain 7,200 points on the one hand, and 7,465 points on the other.

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 7200.00 points would restart the selling pressure.

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 7200.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart