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Volatility intensifies on the CAC, which again came close to its absolute records on Wednesday, with the support of the bank, technology and defense, against a background of hot wind from … from Germany!
The markets took advantage of the hope of a substantial progression of public expenditure in Germany. The Conservatives (CDU/CSU) and the Social Democrats (SPD) announced that they had reached an agreement for the creation of an infrastructure fund of several hundred billion euros. In addition, the “golden rule” of the debt brake will be deeply modified, in particular to invest massively in the defense. Currently, this rule limits the federal budget deficit to 0.35%.
If the CAC 40 won 1.56% at 8,173 points, at a good distance from its peaks of the day, the Dax has largely outperformed by winning 3.38%.
Société Générale won 5.17%, Capgemini 5.20%, Stmicro 5.39%, Thalès 7.63%. Saint Gobain (+8.84%) and ArcelorMittal benefited very directly from the will of the new German executive to loosen the budget vice and invest in infrastructure.
“Caution, however, concerning the hopes aroused by” the war economy “,” warns Christopher Dembik, investment strategy advisor at Pictet AM. “This is the fashionable expression of the moment. There has been efforts. Since 2022, the EU has increased its military expenses by 100 billion euros. But we are far from the account. Only five EU countries devote more than 2% of their GDP to defense, as NATO demands in its member countries, while the United States has a military budget of 3.4% of GDP.”
The operators also, of course, keep an eye attentive to the latest developments in the trade war, the degree of intensity of which has mounted a notch this week. Recall that customs duties up to 25% on import products from Canada and Mexico entered into force yesterday. Even if operators feed the hope that an agreement can be reached between Washington and its immediate neighbors.
“Many believe that they will be at least partially lightened (reduced rate and/or specific exemptions) in the coming weeks. As the evolution of the trade war progresses, investors will reassess their anticipations in terms of customs duties, which could cause persistent volatility of the markets”, analysis Joshua Jamner, senior analyst in investment strategy at Clearbridge Franklin Templeton).
It is with this complex equation that the European Central Bank must compose, BCE which completes this Thursday a council of governors.
“Even if some discordant voices are now heard, the ECB should once again lower its key rate of 25 base points at the meeting on March 6,” anticipates Emmanuel Auboyneau, associate managing at Amplegest.
“The inflationary data remains reassuring and economic activity is always low, thus justifying this monetary easing. Beyond this decision it will be interesting to listen to Christine Lagarde who will set the tone for the next meetings. She should not get rid of her customary prudence but we hope that she will remain in the camp of an expansionist monetary policy that Europe really needs. Budget which, jointly with central bank rate reductions, could revive a sluggish economy. “
Meet at 2:15 p.m. for the decision of monetary policy proper and at 2:45 pm for the press conference of C Lagarde.
This second part of the week will also “work” in terms of American employment health, with the highlight this Friday the NFP (non -Farm Payrolls) report. To be continued at 2:30 p.m. this Thursday, weekly registrations for unemployment benefits, after the disappointment aroused yesterday by the conclusions of the investigation of the ADP.
On the other side of the Atlantic, the main shares on shares closed in green Wednesday, like the Dow Jones (+1.14%) and the composite Nasdaq (+1.46%). The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, contracted 1.12% to 5,842 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 $ 1,0810. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 66.50. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.31%.
Key graphics elements
The tricolor flagship index is typically in the consolidation phase, between the 8,000 symbolic points and the historical summits which it has just brushed. The latter will day for the coming months an intermediate level of resistance, to which the index will attack when it has accumulated enough energy. Only a brutal break in the 7,810 points would ring the alarm. Work between 7,810 and 8,000 points in the coming weeks is the favorite graphic scenario.
FORECAST
In view of the key graphic factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.
This downward scenario is valid as long as the CAC 40 rating index below resistance at 8260.00 points.
The News Bulletin 247 Council
Hourly data graphics
Daily data graphics
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