(News Bulletin 247) – The CAC 40 index, reflecting the greater caution of operators before the outcome of a key FOMC from the Fed, closed down 1.24% to 6,395 points, in discreet volumes. The Fed unveiled at 8:00 p.m. (well after the close of Paris, therefore), its decision to raise its Fed Funds by 50 basis points, while announcing the start of the gradual reduction of its balance sheet. If future rate hikes of an equivalent magnitude are on the table, J. Powell made it clear that increases of a greater magnitude (75 bps) were not “actively considered” by the members of the Board. A less aggressive tone than the market feared since the beginning of the week, and which allowed an easing movement on government bond yields.
For the months to come, the Fed will have to take into account the chronic tensions on the labor market, tensions which themselves generate inflation. Before the publication this Friday of the federal NFP (Non Farm Payrolls) report, investors had a “taste” yesterday with the publication of the ADP survey. The private human resources firm highlighted 247,000 job creations in the private sector (excluding agriculture) last month, well below expectations (more than 380,000).
On the values side, Solvay jumped 5.83% to 94.74 euros after raising its underlying gross operating surplus forecasts for 2022. The Belgian chemical company reported record sales and a sharp increase in net profit on the first three months of the current year. On the other hand, the results announced by EDF were coolly received. The title EDF limits its losses to 2.47% to 8.378 euros, while the energy company has yet announced a sharp increase in its turnover in the first quarter. However, he warned that nuclear production will penalize Ebitda due to the necessary purchases on the wholesale markets in a context of sharply rising prices.
On the other side of the Atlantic, the main equity indices smiled on the decline in government bond yields. Yesterday the Dow Jones gained 2.81% to 34,061 points and the Nasdaq Composite, very sensitive to the question, 3.19% to 12,964 points. The S&P 500, the reference barometer of risk appetite in the eyes of fund managers, gained nearly 3% (2.99% at 4,300 points).
A point on the other risky asset classes: around 08:00 this morning on the foreign exchange market, the single currency was trading at a level close to $1.0610. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $108.50.
To follow as a priority, on the agenda this Thursday, French industrial production at 8:45 a.m. and new weekly registrations for unemployment benefits across the Atlantic at 2:30 p.m.
KEY GRAPHIC ELEMENTS
In just two sessions, the flagship Parisian index cleared up two remaining gaps, one bullish, from March 16, the other bearish, from April 25, again activating the scenario of a sideways drift around 6,500 points. . The volumes are placed under surveillance, especially on any rapid navigation from one terminal to another or on breaks, if any, of one or other of these terminals. The lower limit, around 6,380 points, is particularly threatened.
The decrease in successive high points is now very clear: 05/01, 10/02, 29/03, 21/04, 29/04.
However, the opinion is positive in the very short term.
FORECAST
In view of the key graphic factors that we have 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 is above the support at 6380.00 points.
Hourly data chart
Chart in daily data
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