CAC 40: a market still very

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With the support of luxury and spirits, sectors particularly sensitive to customs issues, the Paris market finished at levels close to balance on Tuesday, for its first session of the second half.

The Trump administration suggested that negotiations and potentially the suspension of the heavy customs surcharges could be extended beyond this deadline. What bring oxygen to L’Oréal (+2.69%), Interparfums (+3.69%), Christian Dior (+4.99%), Pernod Ricard (+5.01%), LVMH (+5.50%), Kering (+5.94%), and Remy Cointreau (+7.34%).

On the indicators side, inflation in the euro zone is generally emerged in line with expectations, with an increase in prices of 2% over one year in June after 1.9% in May. “The slight increase in total inflation in June was expected, but underlying inflation remains stable for its part,” notes Juliette Cohen of CPR AM. The increase is 2.3% if you remove energy, food, alcohol and tobacco from the basket, the most volatile elements.

“The mission of the European Central Bank is generally accomplished and a break can now be envisaged unless additional trade tensions between Europe and the United States are not materialized in the coming weeks,” continues the decideer in asset management.

In addition, the final data of PMI activity indicators in industry in the euro zone, have hardly been excluded from the first estimates, at 49.5. Dr. Cyrus de la Rubia, chief economist at the commercial Hamburg Bank has brought the following additional lights:

“The Manufacturing sector of the euro zone shows signs of stabilization at the end of the second quarter. Production has increased somewhat for a fourth consecutive month, the new orders have stopped falling back and the slight extension of the delivery times of inputs recorded during the month testifies to a modest resumption of demand. These positive developments highlight the resilience of the sector in the current context Linked to the customs policy of the United States, the crisis in the Middle East and the war between Russia and Ukraine.

In addition to the Atlantic, the manufacturing ISM came out slightly beyond expectations, as is new job offers (Jolts), in precious vanguations before the publication, Thursday once it is not customary, of the NFP (non-Farm Payrolls) report on private employment health. Friday, Wall Street will remain closed for July 4 (Independence Day).

Appétit for risk therefore does not contract frankly. “Far from the access to stress in the past few weeks, investors have found a smile. Between drop in geopolitical tensions, lull on the commercial front (no new surprise tax signed Donald Trump for once!) And speeches deemed accommodating by Jerome Powell, the climate was clearly soothed. Result: the markets come back to assault their summits. (“All time high”) As if nothing had happened and worries about American assets seem only a distant memory.

On the other side of the Atlantic, the main equity index finished the Tuesday session in dispersed order, the Dow Jones winning 0.91% and the Nasdaq Composite contracting by 0.82%. The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, has once again played the averages by finishing close to the balance in the immediate vicinity of the 6,200 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 $ 1,1790. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 65.05. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.25%. As for the Vix, it was worth 16.83 at the last fence of the S&P500.

At the macroeconomic agenda this Wednesday, to follow in priority the results of the survey of the private firm in HR ADP at 2:15 p.m.

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 7512.00 points would relaunch the selling pressure.

Hourly data graphics

Daily data graphics