CAC 40: On levels of great firmness, but without serenity

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Without significantly moving away from its historical peaks tapped on Monday, March 3, the CAC 40 will have had a week of intense volatility, marked by a warm -up of the VIX, the index of fear, against the background of Drum’s procrastination on customs duties, and a unprecedented reconfiguration of global geopolitics. The defense sector, with the prospect of a massive rearmament will have very largely outperformed. The announced end of the budget gold rule in Germany, opened it to massive investments in infrastructure and defense.

Reverse of the medal, “the outbreak of German bond yields in recent days reflects the concern of the market in the face of the government’s expansionist budgetary plans, which announce an increase in debt and inflationary risks”, notes David Zahn, head of European bond management at Franklin Templeton. “This strong revaluation, which marks the highest increase in yields over two days since 1997, has repercussions on the global bond markets, resulting in an increase in yields in Europe and the United States. Investors must prepare for persistent volatility while the market adjusts to this new budgetary framework”.

The CAC 40 contracted 0.94% to 8,120 points on Friday, after a statistical marked session by the publication of the NFP (non-Farm Payrolls) report on private employment health in the United States. The unemployment rate increased slightly, at 4.1% of the active population, where consensus increased stagnation to 4.0%. The number of job creations are lacking, with little, expectations, just over 150,000. Ras, however, concerning the increase in average time wages at +0.3%.

The day before, the ECB finished a new council of governors, which are sold by a drop of 25 basic points of its main key rate.

“The ECB has met expectations by reducing its rates, despite the increase in inflation forecasts following Germany’s decision to significantly increase its tax expenditure. We believe that Germany’s decision can change the game for Europe in the long term, but we must also recognize the very important structural challenges with which the German (and therefore European) is currently confronted. And the increase in energy prices mean that short -term growth prospects remain low and that a new reduction seems justified at this stage “, for Matthew Morgan, responsible for the Fixed Inomie management.

On the values ​​side, JCDecaux increased more than 5.7% in the aftermath of a jum of 13.9% still increased by the announcement Thursday of performance higher than expectations in 2024. Air France-KLM was the subject of some profits (-4.9%) after having won almost 33% Thursday and signed the highest upright in the stock market. Luxury also suffered in the wake of Ferragamo (-15.90%) sanctioned on the Milan Stock Exchange after revealing 2024 disappointing results. Kering returned 3.9%, LVMH sold 2.8% while Hermès lost 2.5%.

On the other side of the Atlantic, the main shares on shares finished the Friday session in the green, like the Dow Jones (+0.52%) and the Nasdaq Composite (+0.70%). The S & P500, reference barometer of appetite for the risk in the eyes of fund managers, nibbled 0.55% to 5,770 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 $ 1,0830. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 66.90. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.29%.

At the macroeconomic agenda this Monday, the index feelix of confidence of investors in the euro zone at 10:30 am.

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.

Hourly data graphics

Daily data graphics