(News Bulletin 247) – This article, with open access, is produced by the stock market analysis and strategy research team at News Bulletin 247. To ensure you don’t miss any opportunities, consult all the analyzes and discover our portfolios by accessing our Privileges area.
The CAC 40, on Tuesday, traced a star doji school, a marker of indecision, the day after the surprise resignation of Sébastien Lecornu, a resignation further plunging France into chronic political instability.
Fidel Martin, President of Exoé, is “convinced that political stability is an essential lever for the harmonious functioning of financial markets. Investors do not only bet on economic results: they bet on the predictability and consistency of government decisions. Each prolonged ministerial vacancy, each surprise reshuffle, acts as a brake on the appetite for risk and confidence in the French economy.”
Above all, the political impasse prevents France from adopting a budget for 2026 and thus correcting the trajectory of its public finances. Goldman Sachs is counting on a deficit of 5.5% of GDP for this year (compared to 5.4% for the government) but above all on 5.3% of GDP for 2026, much more than the 4.7% targeted by the resigning Prime Minister Sébastien Lecornu.
On the value side, the trend was supported by increases in luxury goods, notably Kering and LVMH, which gained 5.75% and 3.6% respectively, driven by advice increases from Morgan Stanley to “overweight” on the two securities. It is clearly these luxury weightings which allowed the CAC 40 to end Tuesday’s session symbolically in the green (+0.04%).
On the other side of the Atlantic, the main equity indices finished in red territory, like the Dow Jones (-0.20%) and the Nasdaq Composite (-0.67%). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, returned 0.38% to 6,714 points.
An update on other risky asset classes: around 8:00 this morning
> On the foreign exchange market the single currency was trading at a level close to $1.1610.
> The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $62.20.
> THE Treasuries 10 years, yield on federal sovereign bonds maturing in 10 years, were trading slightly above the 4.12%.
> As for the VIX, it was worth 17.20 at the last close of the S&P500.
On the macroeconomic agenda this Wednesday, follow the Fed Minutes at 8:00 p.m. as a priority.
KEY GRAPHIC ELEMENTS
While the CAC had just overcome major resistance, on a wide gap (October 2), the session of October 6 changed the situation. The gap mentioned, although ample and formed on either side of the 8,000 points, can no longer be described as a rupture gap (breakaway gap). Which strongly calls into question the scenario of an immediate bullish extension towards 8,260 points.
FORECAST
Considering the key graphical 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 crossing 8260.00 points would revive the buying tension. While a break of 7940.00 points would restart the selling pressure.
News Bulletin 247 advice
Hourly graph
Daily Data Chart
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
