CAC 40: Divergence of monetary policies

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The CAC 40 index went early to attack the resistance threshold of the 8,000 points, grapping 0.88% to 7,941 points, after having taken note of the elements of language used by C Lagarde at the end of the first council of governors of the ECB this year, and while a first salvo of quarterly technical vehicle results reassured the financial community.

“A new decrease in the BCE rates a few hours after maintaining the Fed rates is above all a world of global divergence in monetary policy,” explains Matthew Morgan, head of the Fixed Management Income Jupiter Am. “This divergence is clearly justified by different growth prospects, but the growing disparity in interest rates, combined with the appetite of investors for American companies, underlines the excessive dependence of the global economy with regard to states -Unis. “

It is therefore a real dichotomy, such as polite and monetary objectives, which prevails on both sides of the Atlantic. “The consensus is in favor of a new drop in rate at the next meeting which will take place in March,” said Raphaël Thuin, director of capital market strategies at Tikehau Capital.

“Beyond that, certainties fade and the path promises to be more winding. The ECB must always deal with a context of economic stagnation in Europe (growth at the fourth quarter 2024), encouraging it to bring quickly The key rate at a neutral or even accommodating level. European monetary policy with that carried out by the Fed and its impact on the relative weakness of the euro, is also to be taken into account. “

The day before, the American Federal Reserve (Fed), as expected by the market, opted for the status quo on its guiding rates. Jerome Powell, the president of the Fed, said that the Central Bank should see any “new progress” in terms of inflation or a weakening of the labor market to soften its policy more, but he added that the Fed had No need to see inflation “return to 2 %” to reduce rates.

On the values ​​side, the market was busy digesting the very many business results. Red lantern of the CAC 40, Stmicroelectronics plunged by 10.7%, after delivering disappointing forecasts for its first quarter. As for increases, Eurofins Scientific jumped 5.6% after announcing 2024 improvement accounts and 2025 prospects that have attracted the Paris market. Another publication which had the favors of investors, Sanofi which increased by 1.7% while the pharmaceutical group indicated to aim for two -figure growth of its profit per share for its core business activities in 2025. A target qualified as “Solid” by Stifel.

On the other side of the Atlantic, the main shares on shares have finished symbolically in green, like the Dow Jones (+0.38%) and the composite Nasdaq (+0.25%). The S & P500, reference barometer of appetite for the risk in the eyes of fund managers, gained 0.53% at 6,071 points.

A point on the other asset classes at risk: around 8:00 am this morning on the exchange market, the single currency was treated at a level close to $ 1,0380. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 73.20.

At the macroeconomic agenda this Friday, to follow in priority, across the Atlantic, the “PCE” prices at 2:30 p.m. This is the favorite measure of the Fed in its appreciation of inflation. To follow also carefully, household income and expenditure at 2:30 p.m. and the PMI index of Chicago at 3:45 p.m.

Key graphics elements

We attended a major technical and graphic fact Thursday January 16 with crossing on Gap then extension in session, from the pivot threshold of the 7,500 points, which finds its support attributes. The current work base therefore becomes a band between 7,500 and 7,690 points, in which a certain form of volatility is far from excluded.

This crossing was immediately followed by a new GAP (less ample) and a bullish extension in session, with the participation of many sectors, marking the assertion of the buyer camp.

A first manifestation of a need for courses breathing was illustrated on Wednesday with a high shadow on the candle, on a level close to the 7,800 points, the first palpable obstacle since the rush crossing of 7,465/7,500 points. Between 7,900 and 8,000 points, the flagship index comes into a very short -term over -rascal zone, premises a consolidation entry.

The index just flirted with the 8,000 symbolic points on Friday and reflected on Monday. Both doji Indecision traced at the heart of the week are a marker of a wait -and -see attitude, and therefore of a precarious balance, at the start of consolidation.

FORECAST

In view of the key graphic 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 a crossing of the 8000.00 points would revive the tension to the purchase. While a break in the 7810.00 points would relaunch the selling pressure.

Hourly data graphics

Daily data graphics