CAC 40: Return of risk aversion

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The last session of the week will have been colored with bright red, investors showing a feeling of risk aversion, linked to the conflagration of the situation in the Middle East. The CAC 40 finally contracted at the end of 1.04% on Friday at 7,684 points, displaying a negative weekly assessment (-1.54%).

One of the threats that the market feared has now become reality. Israel attacked Iran on Friday to Friday to Friday, affecting military sites and nuclear installations. On the fourth day of the conflict, the Israeli army said early on Monday that new missiles from Iran towards Israel had been detected. Since Friday, at least 224 dead have been identified in Iran, against at least ten people killed in Israel.

“The coming days will tell us at what risks we are going to be confronted, but they are clearly negative for the world economy,” said Sébastien Paris Horvitz, of LBPAM. “We can only fear an escalation. In fact, the scholarships react negatively (…) and the price of oil is flying away, reaching a price around $ 75 a barrel (Brent), have been at the highest level since the start of the year,” continues the economist.

“The Middle East powder maker has just blowed up the world market cover (…) This time, the flames are no longer metaphorical,” comments Stephen Innes, of SPI AM. The expert fears that a closure of the Ormuz Strait, by which 21% of world oil consumption, aggravates the situation.

“If the Strait of Ormuz, which represents 20 % of the world’s world flows, is in the radius of the explosion, you can add $ 15 per barrel,” he said.

The geopolitical situation in the Middle East obscured the main statistical figure of the day, namely the preliminary data of the consumer confidence index (U-Mich), emerged significantly above expectations, at 60.5.

On the values ​​side, the oil and parapetrolle values, which were well oriented, end slight increase. Totalnergies grabbed 0.1%, just like Vallourec or Virid. Conversely, Air France-KLM rendered 4.7%, the fuel invoice constituting one of the largest expenditure posts for airlines. Soitec dropped 6.4%, weighed down by a lowering of recommendations from Jefferies, which degraded its opinion to keep and lowered its price target to 50 euros.

On the other side of the Atlantic, the main shares on shares have undergone supported clearances, like the Dow Jones (-1.79%) and the Nasdaq Composite (-1.30%). The S & P500, a reference barometer for the risk of the risk of fund managers, lost 1.13% to 5,977 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 $ 1,1540. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 72.20. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.43%. As for the Vix, it was worth 20.82 at the last fence of the S&P500.

At the macroeconomic agenda this Monday, to follow the manufacturing index of the Fed de NY at 2:30 p.m. Note the diplomatic journey of E Macron yesterday to Groënland, aimed at asserting the EU opposition to American annexed inclinations. And this just before G7 in Canada.

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) Adopt a persistent lowering bias since May 13. The tricolor flagship index is now in a glaring situation of incapacity for creations of new heights.

First alert Thursday, June 12 with a metal gap in session. Second the next day with a new gap, filled in the session too.

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 7810.00 points.

Hourly data graphics

Daily data graphics