CAC 40: Graphical pressure of 7,465 / 7,500 points

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We will first note that this January 9, a day of national mourning in the United States, Wall Street will close its doors. Deprived of a benchmark of choice, the CAC 40 will therefore navigate volumes that are very likely lower than its daily average. Our flagship index, which symbolically traced a hanging candle under a graphic resistance zone, contracted by 0.46% to 7,452 points on Wednesday, in a market mood weighed down by tech.

Alten lost 3.17%, Wordline 3.62%, Soitec 3.89%, Ubisoft 5%, XFAB 5.10%, STMicro 4.32% and OVH 6.15%.

At the session’s low, the index lost 1.2% after the publication of a CNN article reporting that Donald Trump was considering declaring a national economic emergency to legally justify universal tariffs. CNN’s sources specify that no final decision has been made and that the president-elect’s teams are exploring other legal avenues to be able to introduce the customs surcharges promised by Trump during his presidential campaign.

As a reminder, the Washington Post indicated on Monday that these “universal” customs duties could be restricted to certain sectors and would thus only cover “critical imports”.

In terms of statistics, operators focused on indicators on private employment in the United States, weekly registrations for unemployment benefits (201,000) and a survey by the private firm ADP. The private sector created 122,000 jobs in December, which is a little less than expected. Enough to augur a good federal employment report (NFP for Non Farm Payrolls) on Friday.

Published earlier in the week, “the price component of the ISM Services, which rebounds to its highest level since February 2023 (64.4 vs. 58.2 the previous month), is not good news for the Federal Reserve and its President Jerome Powell who had already warned, in December, that a continued slowdown in inflation towards the target was the necessary condition for further rate cuts Knowing that underlying PCE inflation,. in annual data, has not made further progress towards the objective for two quarters…”, warns Alexandre Baradez (IG France).

“The rebound in the number of available jobs (JOLTS figure) will also push the Fed to be patient because it removes possible fears linked to the job market, the Fed’s other mandate.”

We are currently witnessing a return – yet to be confirmed – of the theory of “Good News is Bad News”, namely that any good news, macroeconomic in this case, can be a sign inviting the Fed to drastically moderate its rate of decline in rates.

To be complete on the values ​​side, Thales signed the largest increase in the CAC 40 this Wednesday evening (+4.2%), supported by the declarations of Donald Trump, who called, Tuesday evening, the member countries of the Organization North Atlantic Treaty (NATO) to devote 5% of their GDP to military spending, compared to a minimum of 2% currently set by the organization. Pluxee soared by 15.80%, largely dominating the rankings of compartment A, after having largely exceeded expectations in the 1st quarter.

On the other side of the Atlantic, the main equity indices ended Wednesday’s session in scattered order, like the Dow Jones (+0.25%) and the Nasdaq Composite (-0.06%). . The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, finished close to balance at 5,918 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 $1.0300. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $72.90.

On the macroeconomic agenda this Thursday, priority will be given to retail sales in the Euro Zone at 11:00 a.m.

KEY GRAPHIC ELEMENTS

The CAC 40 index came to test an important graphic level on Monday at the close, 7,465 points, the solidity of which will be tested. The general working base remains, until proven otherwise, a vast band between 7,200 and 7,465 points, within which an indecision marked by nervousness is expressed. The hanged man candle drawn on Wednesday on this resistance level testifies to the difficulties of franking, in a market which remains tense.

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 7465.00 points.

Hourly graph

Daily Data Chart