CAC 40: the trade war, the ‘poison’ of April markets

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The VIX still mounted a notch around 22.30 at the last fence of the S & P500, in a market worried about the consequences still difficult to quantify the trade war waged by Trump. Yesterday the CAC 40 lost some 1.58% additional to 7,790 points, further enduring the break in the 8,000 points, a threshold which served as a pivot for the courses throughout the end of winter. The market is stressed by the lack of visibility on the trade war, on the final conditions that the White House will communicate tomorrow and on the still difficult impact to encrypt on the growth of GDP and the activity of companies strongly exposed to export to the United States.

The atmosphere on the markets is clearly heavy upstream of the date of April 2 to which the United States must reveal “reciprocal” customs duties on all of their imports. On Wednesday, Donald Trump had already announced customs surcharge on automotive imports from April 3. “We would start with all countries, we will see,” he said journalists this weekend on the Air Force One presidential plane …

On April 2, “the American administration will celebrate the” Liberation Day “which aims to impose new customs taxes. A universal tax was planned for the first version. Finally, according to the American press, a more targeted approach could be adopted – the conditional is important,” explains Christopher Dembik, investment strategy advisor at Picte Am

“Only countries imposing customs taxes and presenting a trade deficit with the United States would be targeted. Concretely, it is the EU, Mexico, Japan, South Korea, Canada, India and China. These new prices could generate” thousands of billions of dollars over a decade “, the previous American administration. Caution: American customs income on China, after reaching a peak in 2022, fell sharply in 2023, illustrating the adaptability of companies in the face of trade barriers.

Enough to create uncertainty on the markets, everything they have precisely horror. The difficulty is also palpable on the side of the federal reserve. “”[Ces] measures […] could further reduce Fed’s room for maneuver as to new rate drops, “said Grégoire Kounowski, Investment Advisor at Norman K.

In the “most pessimistic scenario [de Pictet AM]if a 20% customs tax is set up with regard to all European goods imported into the United States, this could cost European growth 0.8% of GDP. Knowing that GDP should grow around 1% -1.1% this year, it would mean that the economy may stagnate. “

In terms of values, unsurprisingly, titles very exposed to customs risk underwent heavy releases on Monday, like Valeo (-3.64%), Forvia (-5.41%), or Kering. Maurel & Prom dropped 14.6% in reaction to the United States revocation of its specific license to exercise its oil activities in Venezuela.

On the other side of the Atlantic, the main shares on shares finished in dispersed order, the Dow Jones winning 1.00% while the Nasdaq Composite remained in the red (-0.14%). The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, nibbled 0.55% to 5,611 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 $ 1,0800. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 71.40. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.19%. As for the VIX, it was worth 22.28 at the last fence of the S & P500.

At the macroeconomic agenda this Tuesday, to follow in priority new inflation figures in the euro zone at 11:00 am, as well as the American manufacturing barometer at 4:00 p.m.

Key graphics elements

The technical framework evolves, with a break in the psychological pivot threshold of the 8,000 points at the end of the week 13. This rupture is not formally supported by volumes and a sectoral federation, or even a GAP, but it is sufficiently symbolic to cause a loss of progressive confidence in the spirits. Major questioning, in progress for several weeks, can now result in a continuation of the reflux under the long mobile average at 50 days (in orange).

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.

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