CAC 40: Lateral channel reintegration

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The CAC plunged at the end of the session as the impetuous and unpredictable used its favorite weapon, namely customs duties. Donald Trump judged this Friday, September 10 that China was “becoming very hostile” after Beijing’s restrictions on rare earth export authorizations.

In retaliation, he indicated that he was considering a “massive” increase in customs duties on Chinese goods entering the United States, in a message posted on his Truth Social network.

Until now the market has managed as best it can to preserve the threshold of 8,000 points in a political situation that is as complex as it is complicated. Since last night, we have a new list of ministers in the Lecornu 2 government, mixing old political veterans and personalities from civil society. Enough to rule out in any case for the moment the prospect of early elections, and to revive hopes of the adoption of a budget, even imperfect, for next year.

Sébastien Lecornu will make his general policy declaration tomorrow afternoon.

On the value side, companies in the automotive, luxury and steel sectors, sectors directly and/or indirectly exposed to customs risk, experienced a difficult end to the session. Red lantern of the CAC 40, Stellantis also turned downward, falling 7.3%, while the stock was up slightly driven by significantly increased sales (in volumes) in the third quarter.

The action of the automobile group is followed by Arcelormittal (-5.8%), and the luxury groups Hermès which returned almost 3%, and LVMH which lost 2.4%.

Technip Energies (-7.75%) and Nexans (-3.1%) were both weighed down by Exane BNP Paribas, which, according to Reuters, went from “outperformance” to “neutral” on the first and from “neutral” to “underperformance” on the second.

On the other side of the Atlantic, the main equity indices ended Friday’s session in heavy decline, like the Dow Jones (-1.90%) but especially the Nasdaq Composite (-3.56%). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, lost 2.71% to 6,552 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 $1.1620.

> The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $59.75.

> THE Treasuries 10 years, yield on federal sovereign bonds maturing in 10 years, were trading slightly above the 4.07%.

> As for the VIX, it was worth 21.66 at the last close of the S&P500.

On the macroeconomic agenda this Monday, no major figures appear.

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.

The session of Friday, October 10, with its acceleration in prices and its closing at its lowest, even suggests the scenario of a false exit, and therefore a reintegration of the range between 7,500 and 7,940 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 8116.00 points would revive the buying tension. While a break of 7512.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart