CAC 40: Austerity, why not, but uncertainty, that no!

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The market is much more afraid of political indecision than budgetary austerity. This is in substance, the interpretation that can be made of these last two sessions. After a reflux of 1.59% on Monday, the CAC 40 amplified its decline, by 1.70% Tuesday, weighted by “domestic” values, whose activity is linked to political and budgetary decisions, and public procurement. We find without surprise the banks, like Société Générale (-6.84%), and construction and concessions, like Vinci (-5.80%).

announced on Monday that he would submit his government to a vote of trust on September 8, thus opening the way to a risk of censorship. Especially since the national rally, rebellious France, the Socialist Party and the environmentalists have announced that they will not give confidence to the government in the context of this ballot. Between them, the deputies of these different political camps mathematically form a majority, leaving little chance of the maintenance of the current government. The hypothesis of a new Prime Minister, with necessarily different political balances, becomes the privileged working basis. It is from this uncertainty that the market hates.

This announcement has rekindled the spectrum of a political blocking in France, with the risk that measures necessary for the recovery of the trajectory of French public finances are not taken. OAT 10 years heats up above 3.51%, above Greek rates in the same way (3.46%).

On the statistical component, the operators learned of the consumer confidence index (Conference Board), came beyond expectations at 97.4.

On the other side of the Atlantic, the main shares on shares grabbed a few points, like the Dow Jones (+0.30%) and the Nasdaq Composite (+0.44%). The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, appreciated 0.41% to 6,465 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 $ 1,1620. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 63.20. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.26%. As for the Vix, it was worth 14.62 at the last fence of the S&P500.

At the macroeconomic agenda this Wednesday, to follow in priority the levels of crude stocks across the Atlantic, at 4:30 p.m.

Key graphics elements

The vast range (lateral channel), whose amplitude has once again been redefined on July 31 and August 1, retains meaning, and the discharge of courses on Monday August 25, in contact with the high terminal comes to confirm it. The 7,500 points are reinforced in their support role as much as the 7,940 points are in their role of resistance.

FORECAST

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

This bullish scenario is valid as long as the CAC 40 index rating above the support at 7682.00 points.

Hourly data graphics

Daily data graphics