CAC 40: On a technical pivot

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After having finished very well last week, against a backdrop of hoping of lull in the trade war, CAC 40 (-0.33% Monday at 7,665 points) met with winds in contact with the intermediate resistance zone of the 7,700 points.

“Uncertainty around American trade policy will probably dominate the start of the second half, with the end of the break on certain customs duties on July 9 and hearings on the IEEPA (International Emergency Economic Powers Act, the American law which grants the president of extensive powers to regulate international trade in response to national emergency situations) scheduled for the UBS strategists, who “anticipated[ent] that the effective rate of American customs duties will stabilize around 15 % (compared to around 3 % last year), with a higher rate of 30 to 40 % in China. This should curb American growth and increase inflation, without however provoking a recession.

In the statistical chapter, little to put in the tooth on Monday. Let us quote the PMI of Chicago, which stagnates at 40.4, missing expectations. Investors continue to digest inflation figures for the end of last week. The PCE prices raised up 0.2%, twice as much as the consensus augur.

“PCE inflation measures (Personal consumption Expenditure) are the most monitored by the members of the federal reserve, these are those used in the quarterly projections of the institution and which serve, among other indicators, to adjust the level of the rate range, “recalled Alexandre Baradez, IG France analyst before the publication of these key figures for the market.

What give additional support to J Powell in his delay strategy, while Trump continues to exert disproportionate pressure for the Fed to lower its guiding rates.

Luxury values ​​were carried by a Chinese economic indicator less degraded than feared. The index measuring the manufacturing activity in China was 49.7 points in June, where the consensus awaited a 49.6 -point index. At the head of the CAC 40, L’Oréal thus won 2.2%, Hermes increased by 1.05%when Kering grapped 0.2%. Automobile groups Stellantis (-3.45%) and Renault (-3.4%) closed the Parisian index, followed by Schneider Electric (-12.8%) and Bureau Veritas (-1.7%). On the side of the small and medium capitalizations, Exeil Technologies jumped more than 13.40%, carried by the signing of a contract and the opinions of positive analysts on the value.

On the other side of the Atlantic, the main shares on shares have once again progressed, like the Dow Jones (+0.63%) and the Nasdaq Composite (+0.47%). The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, gained 0.52% at 6,204 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 $ 1,1780. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 64.45. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.21%. As for the Vix, it was worth 16.72 at the last fence of the S&P500.

At the macroeconomic agenda this Tuesday, to follow the final data of PMI activity barometers as a priority in the euro zone for June at 10:00 a.m., and for the United States at 4:00 p.m., the manufacturer’s ISM as well as new job offers (JOLTS).

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. The short -term configuration is gradually weakened.

The intermediate support of the 7,500 points nevertheless allowed the flagship index to find oxygen at the end of the week 26. It is already back on an intermediate resistance to 7,700 points.

FORECAST

In view of the key graphic factors that we have identified, our opinion is neutral on the CAC 40 index in the short term.

We will take care to note that a crossing of the 7700.00 points would revive the tension to the purchase. While a break in the 7605.00 points would relaunch the selling pressure.

Hourly data graphics

Daily data graphics