CAC 40: New kick in the pricing anthill

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It will first note that this Monday, May 26 is a holiday in the United States (Memorial Day), and that Wall Street will remain closed. Deprived of this precious landmark, Paris should suffer from a substantial contraction of transactions volumes.

Volatility has exploded again at the end of last week, after the new “pressure” tariff addressed by Trump to the European Union. The brutal tenant of the White House threatens customs taxes of 50% on June 1, against 10% today. The American president justifies this announcement by the difficulty of commercial negotiations with Europe.

“It is very difficult to deal with the EU, which was created in the first place to take advantage of the United States from a commercial point of view. (…) Our discussions are going nowhere. Under these conditions I recommend that I impose 50% customs duties on the EU, from June 1. There are no customs duties on products manufactured in the United States,” he wrote on his Truth Social platform.

Customs duties applied to European products currently amounted to 12.5% ​​on average, 2.5% corresponding to the level before Donald Trump’s return to the White House, to which have been added 10% since early April and the announcement of his so -called “reciprocal” customs duties. The White House initially planned to tax European products up to 20%, before announcing a 90-day break on customs duties beyond 10%, the time to let the negotiations arrive at their end.

Trump repelled his ultimatum yesterday by postponing the deadline for commercial negotiations on July 9. Ursuala von der Leyen called the White House tenant, to request a delay in order to reach a constructive agreement.

It is therefore a bright red weekend for the CAC 40 which ends in sharp decrease of 1.65% to 7,734.40 points. The Parisian index had lost more than 3% in the afternoon, bending under the fears fed by investors on the return of a large-scale trade war.

The values ​​of luxury and the automotive sector very exposed to customs risk have experienced a difficult session. Red lantern of CAC 40, Essilorluxottica abandoned 4.80%, Stellantis lost 4.6%. Hermès returned 2.6%, LVMH -1.6%. On the side of spirits, Rémy Cointreau dropped 4.1% when Pernod Ricard contracted 3.10%.

On the other side of the Atlantic, the main shares on shares finished the session of Friday in bright decrease, the Dow Jones losing 0.61% and the Nasdaq Composite 1.00%. The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, lost 0.67% to 5,802 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 $ 1,1400. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 61.60. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.55%. As for the Vix, it was worth 22.29 at the last fence of the S&P500.

At the macroeconomic agenda this Monday, to follow a speech by C. Lagarde, president of the ECB, at a conference at the Hertie School, in Berlin.

Key graphics elements

The gradual cap under the 7,900 points has suddenly turned into intense volatility. In one session Friday, May 23, the Parisian flagship index broke the Dynamics of the spring rally by breaking the mobile average at 20 days (in dark blue), the difference compared to the mobile average at 50 days (in orange) has taken up strongly.

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 7900.00 points.

Hourly data graphics

Daily data graphics