CAC 40: Trade Wars, EP V, Europe counterattack

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In the current crash, since the brutal customs announcements of Donald Trump on April 02, there has not yet been an abdication movement. This panic stage, concentrated over a few hours, is not a figure imposed in a crawl, or a crawling krach, but if necessary, would have the merit of clarifying the situation by a purge which would make the graphic messages very readable. We will obviously come back to our next article on the training of a possible market abdication.

Recall that in the case of the European Union, the surcharge announced by the White House is 20%. In response, Brussels could lead the offensive by focusing on taxation of digital services. In the meantime, the ambassadors of the Member States have met in an emergency. According to the White House, around fifty countries have engaged in negotiations with Washington.

“Europe plans to announce retaliatory measures soon and China has already reacted with 34% increase in its customs duties on American imports, enough to maintain climbing,” commented Natixis analysts. “The new customs duties announced by Donald Trump Wednesday evening are particularly punitive for China, which was inflicted additional rights of 34%.”

Proof of the cacophony which reigns within the American executive – as if the market needed a little more nervousness! – E Musk, a high counselor from the United States, has publicly dealt with Cretin Peter Navarro, the business advisor to Donald Trump. Tesla Elon Musk’s boss estimated, in two messages published on Tuesday on X, that Donald Trump’s commerce advisor Peter Navarro was a “moron” and “beast as his feet”. The richest man in the world, who has already reported his disagreement with the customs rights policy of which Peter Navarro is the great architect, wrote these comments under a video in which the trade advisor believes that Elon Musk “is not a car manufacturer” but only a “assembler”.

“The sectors of chemistry, automotive and technology (equipment) should be the most affected in Europe,” warns Fitch ratings in a note, supporting the case of the automobile: “European car manufacturers are faced with an increased risk at the level of the supply chain due to their dependence on supplies from Mexico and Canada (although components of vehicles Compliance with USMCA are not subject to customs duties), as well as Europe for their sales in the United States.

After several postpones, the European Union agreed on targeted retaliation measures, on a very precise list of products. This is a first package of reprisal measures, “calibrated”.

In the statistical chapter, little to put in the tooth on Tuesday. We will note the trade deficit of France, which deteriorated in February, at almost 8 billion euros, against -6.5 billion euros, completely missing the target. The day before the operators have acted the collapse of the “Fentix”, a confidence barometer of investors in the euro zone, in the immediate vicinity of the -20 points. The only German component melts at -36.3 points. In the survey, published on Monday, it can be read that American economic expectations have fallen at their lowest level since October 2008, while the price shock has fueled the fears of a global recession.

On the values ​​side, very strong files with current beta effect have outperformed the flagship index, like Vicat (+5.62%), Opthubility (+5.40%), or Dassault Aviation (+6.52%).

On the other side of the Atlantic, the main shares on shares ended in red territory like the Dow Jones (-0.84%) but especially the composite Nasdaq (-2.15%). The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, contracted from 0.15% to 4,982 points, breaking the symbolic threshold of the 5,000 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 $ 1,1050. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 56.85. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.42%. As for the Vix, it was worth 52.33 at the last fence of the S&P500.

At the macroeconomic agenda this Wednesday, to follow the US stocks in crude at 4:30 p.m. and the Fed minutes, traditional report of the last FOMC, at 8:00 p.m.

Key graphics elements

The technical framework is upset, with a break in the psychological pivot threshold of the 8,000 points at the end of the week 13. Rupture which was followed by intense clearances, in powerful volumes. The GAP of January 16 is now fully filled, without any reaction from the courses. Worse, a crossing part (7,552 – 7,585 points). In two sessions, Thursday 03 and Friday 04 April, the flagship index lost nearly 520 points, and switched to the red for its assessment since 01/01. Monday April 07, once again showed the extreme psychological tension of a market at the heart of a wave of intense clearances. Abdication is close.

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 lowering scenario is valid as long as the CAC 40 rating index below resistance at 7200.00 points.

Hourly data graphics

Daily data graphics