CAC 40: The markets are trying to deal with the radicality of Trump

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The day after a particularly hectic session due to Trump’s latest announcements on customs prices at the entrance to its territory of foreign products, the CAC was somewhat revived on Tuesday (+0.66% at 7,906 points ), thanks in particular to major performances of two of its components, BNP-Paribas (+4.24%) and Dassault Systèmes (+8.86%), which made quarterly copies that seduced.

Apart from publications, Pernod Ricard sold 1.7% and Rémy Cointreau, 2.45%. The two alcoholiers suffered from their comparable Diageo comparable. The latter fell 1.6% on the London Stock Exchange and published results just. Society has mainly withdrawn its medium -term prospects for macroeconomic and geopolitical uncertainties. The risks of restoration of customs duties on European wines and spirits by the Trump administration are probably not foreign there.

The market was also supported by a (very relative) softening of the t tone on customs barriers. The American president agreed to postpone those hitting Mexico by one month, then those in Canada, after the two countries agreed to strengthen their border controls. This recalls that the American president uses customs duties as a negotiation tool.

Even the brutal 47th President of the United States has recognized itself that the Americans could “suffer”, adding, on its Truth network, that it was the price to pay to know a new “gold” of gold. Brown barriers of all kinds, to prosper better, this is the DNA of Trumpist “philosophy” … Strong hard, to negotiate then then, here is another mantra of the real estate magnate.

“It is difficult to understand at this stage what is the economic objective sought,” wonders Sebastien Paris Horvitz de LBPAM. “The United States would be losing in the current situation, especially since Mexico and Canada intend to take reprisals. Canada has already done so and Mexico should announce measures today.”

“What is already certain is that one of the major objectives of Donald Trump which is to lower inflation, will not be achieved but will get worse in the short term. By following the estimates of the Fed made in the past (in 2018), Bloomberg estimates that the impact on American GDP of the announced measures could cost 1.2 percentage points on American growth and 0.7 inflation points in full year, “he adds.

It is in any case complicated to anticipate the consequences of a surge in customs duties. “If the impact of such customs tariffs on growth and inflation is difficult to measure (many compensation effects), how far is D. Trump ready to” suffer “the Americans? The next few days will help determine How much D. Trump wishes to go to the end of his trade war or if this is only a vast game of negotiations “, for Thomas GIUDICI, head of the bond management of Auris Gestion.

On the other side of the Atlantic, the main shares on shares ended in the green, like Dow Jones (+0.30%) and the Nasdaq Composite (+1.35%). The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, won 0.72%, ironing over the symbolic threshold of the 6,000 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 $ 72.4Les0.

At the macroeconomic agenda this Wednesday, to follow the final data of the PMI services in the euro zone at 10:00 am, the survey of the private firm in HR ADP at 2:15 p.m., as well as the ISM Services at 4:00 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. This balance will be broken from the start of February, by a likely, scale gap.

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