CAC 40: Trump ignores the WTO rules

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The trade war is in full swing, the inflationary signals in the United States multiply and … the markets exult! Yesterday the CAC 40 index, supported by hopes of peace in Ukraine and in a pouring rain of results of companies, managed to move away from the threshold of 8,000 points to get closer to its historical summits (+1.52% at 8,164 points).

Donald Trump announced, ignoring the WTO rules (World Trade Organization) the establishment of reciprocal customs duties, while developing countries are entitled to differentiated rates.

Yesterday statistically, operators learned of weekly registrations for unemployment benefits, still as low at 213,000, synonymous with tensions on the job market. As for the production price index, excluding food and energy, it comes up on a monthly increase of 0.3%, in accordance with expectations. Signals that go in the direction of pressure on prices, the day after consumer price publication up 3% in January, on an annual basis, beyond expectations.

The operators preferred to focus on the positive. The trend in Paris has been carried on the one hand by hopes concerning a potential out of the conflict in Ukraine, and on the other hand, by publications of companies that have pleased the market.

At the top of the CAC 40, we find Legrand (+9%) powered by an activity which atomized consensus in the fourth quarter.

The specialist in electrical equipment is followed by Essilorluxottica (+7.2%) whose publication also attracted the markets. The Franco-Italian group has also published a robust activity in the last three months of 2024 and confirmed its objectives for 2026. Michelin completes this top trio (+4.9%), also helped by 2024 good quality results with a cash flow significantly higher than expectations. Note the good performance of Orange (+3%), supported by results above expectations for 2024 and by its forecast for growth of its main profitability indicator in France of more than 0.5% for this year.

On the other side of the Atlantic, the main shares on shares finished the session of Thursday in the green, with the support of the last customs of Trump. The Dow Jones won 0.77% and the Nasdaq Composite 1.50% in the immediate vicinity of the symbolic threshold of the 20,000 points. The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, gained 1.04% at 6,115 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 $ 1,0470. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 71.40.

At the macroeconomic agenda this Friday, to follow in priority retail sales in the United States at 2:30 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 24 and 31/01 and reflected on Monday 27/01 and 03/02. 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 was broken from the beginning of February, by a large -scale gap. The real test in progress is that of the 8,000 points. A weekly fence above would be a very positive message.

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 8315.00 points would revive the tension to the purchase. While a break in the 8000.00 points would relaunch the sales pressure.

Hourly data graphics

Daily data graphics