CAC 40: Questions are intensifying all out

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Another nervous session, passed entirely below the technical resistance threshold of the 7,900 points on Monday, in A market worried about the revival of commercial tension between Washington and Beijing, and on the outcome of the war between Moscow and kyiv.

Friday, Donald Trump accused his commercial “partner” [la Chine] not to respect “his agreement”. The Washington Brussels front is also monitored like milk on fire. “It is likely that Europe is again the target of the White House in the coming days. This is likely to stir up volatility on the stock market and to encourage institutionalists to alleviate their positions on actions – a phenomenon which is usual before summer but which could be exacerbated this year because of protectionism,” said Christopher Dembik, of Pictet AM.

Investors also have an eye on the situation in Ukraine in the aftermath of a vast drone attack by kyiv against four Russian aerodromes which affected planes, including bombers, according to AFP. A second session of talks with Russia took place this Monday and ended barely an hour after its opening in Istanbul, reports Reuters. Turkish President Recep Tayyip Erdogan once again proposed on Monday to bring Russian presidents Vladimir Putin on Monday, Ukrainian Volodomyr Zelensky and American Donald Trump, “in Istanbul or Ankara,” said AFP.

In the statistical chapter, yesterday morning were published the final data of the PMI activity barometers in industry in the euro zone for the month of May. At 49.4 in final data, the score for the entire monetary union of varies no iota compared to the first estimates. Recall that a score lower than the 50 mark means a contraction of the sector considered.

In addition to Atlantic, US manufacturing activity has further deteriorated in May, according to the monthly survey of the Institute for Supply Management (ISM). His index fell, against all expectations at 48.5 points in May, where the consensus compiled by Reuters was waiting for 49.5 points.

Friday, the PCE index, a preferred gauge of the American Federal Reserve (Fed) to measure inflation, emerged slightly lower than expectations in April, at 2.1%, against 2.2% expected. “PCE inflation has returned to its lowest level for four years and has not currently showed a significant impact of customs duties implemented in recent months,” observes Bastien Drut, head of CPR AM strategy and economic studies. The economist evokes a “very reassuring” publication for the Fed. Also note the good surprise of the consumer confidence U-Mich index, which stands out in revised monthly data almost 1.5 points above the first estimates.

On the values ​​side, it is the automobile in the broad sense (manufacturers and equipment manufacturers) which was suffering, while Donald Trump intends to pass the additional customs duties applied to steel and aluminum, important materials for a vehicle. Renault lost 3.70%, Stellantis 4.78%, Valeo 3.41% and forvia. The Michelin pneumatician, who even in nature of his activities uses rubber, has been much less affected (-0.56%).

On the other side of the Atlantic, the main shares on shares have finished symbolically in green territory, like the Dow Jones (+0.08%) and the Nasdaq Composite (+0.67%). The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, nibbled 0.41% to 5,935 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 $ 1,1430. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 62.20. 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 18.36 at the last fence of the S&P500.

At the macroeconomic agenda this Tuesday, to follow the first estimates of inflation data in May in May in the euro zone at 11:00 am, as well as new job offers (JOLTS) in the United States at 4:00 p.m. Note that this week will be the scene of many figures on American employment with the highlight on Friday the NFP (non -Farm Payrolls) report.

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.

The 7,900 points are reinforced in their status of graphic resistance, even though the dynamics of the relative force index invite caution. Indeed the RSI (relative Strenght Index) has adopted a persistent lower bias since May 13.

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