CAC 40: Small alert in the first week, weekly candle under watch

(Bahrain Stock Exchange) – The possibility of a faster-than-expected tightening of US monetary policy will have repercussions on the CAC 40 index, which lost 1.72% yesterday to 7,249 points, affected by records of luxury and technology, especially leather. -friendly. During the whole session, Kering lost 3.06% to €718.10, Dassault Systèmes 3.65% to €48.685, LVMH 4.08% to €727.10, Téléperformance performed 4.08% to €378, €10, Gemini cap 4.37% to €203.30, and Hermès 4.69% to 1504.50 euros.

Markets were surprised to copy the then-tense discussions about the schedule for the balance sheet shrink, with the minutes released on Wednesday evening. The Fed’s “hawkish” tone at its latest monetary policy meeting looks more than expected as an excuse to indulge in some profit-taking than as a real surprise, according to Jeffrey Haley, an analyst at Oanda. “The minutes revealed that committee members felt that the risks of high inflation now persisted, and that there was general agreement to speed up the rate hike, with three temporary rate increases. Exactly what we were told at the ‘post-FOMC’ meeting, Chairman Jerome Powell. : The only surprise, if you can call it that, is that some members felt that the Fed should start trimming its balance sheet soon after it raised rates for the first time.”

The minutes are a detailed report, including the content of the exchanges and discussions that moved the FOMC two weeks ago. Operators, beyond monetary policy decisions they already know, examine the balance of power between hawks and doves, the arguments used in the debates, and, more broadly, the tone of these debates. For the more curious, here is the document released yesterday, which caused this downward acceleration.

Bastian Drutt, Head of Substantive Macro Strategy at CPR AM, summarizes: “During the December FOMC meeting, the Fed decided to accelerate “tapering”, that is, reducing its net purchases a little more than expected from securities (Treasuries and MBS) , with net purchases expected to end in mid-March 2022. The next question about the Fed’s balance sheet was whether or not the size of the balance sheet would remain stable for some time, or whether it would remain so while Jerome Powell has allowed that discussions are known to be ongoing about On this topic, the minutes of the FOMC meeting from December indicate that the reduction in the balance sheet should happen fairly quickly in 2022: Mentioned there dozens of times!

In terms of values, Carrefour dominated the main index charts with a fresh gain of 6.3%, after a 5.1% increase on Wednesday, owing to rumors of a new takeover bid coming up by Auchan.

In terms of statistics, operators learned satisfactory figures, exceeding expectations without showing a rise in temperature, for producer prices in November (+1.8% in the euro area on a monthly basis). Across the Atlantic, there is a slight deviation to report on their respective consensus for the weekly records of unemployment benefits and the monthly deficit (November) for the trade balance. In contrast, the Services Purchasing Managers’ Index (ISM) came in at 62, far from the target (67) and from the previous month (69.1).

Across the Atlantic, major stock indexes closed in the red yesterday, but at lower rates compared to Wednesday. The Dow Jones contracted 0.47% to 36,236 points and the Nasdaq Composite fell 0.13% to 15,080 points. The S&P 500, the standard measure of risk appetite in the eyes of fund managers, symbolically lost 0.10% to 4,696 points.

Update for Other Risky Asset Classes: At around 8am this morning in the foreign exchange market, the single currency was trading at a level close to $1,1300. A barrel of West Texas Intermediate crude was being traded, one of the measures of risk appetite in the financial markets $80.00.

To continue on the agenda this Friday, to follow consumer prices in priority in the first estimates for the month of December in the eurozone at 10:00 am, the NFP report (non-farm jobs) on US employment, monthly federal report. As a reminder on Wednesday, operators took note of the results of the ADP (Automatic Data Processing) survey on employment. According to the private human resources firm, the US economy created 807,000 jobs in the private sector (excluding agriculture) in December, far exceeding the target, the highest level since May.

Main Graphic Elements

The underlying trend is not threatened at this point, but it is clear that losses on Wall Street yesterday had repercussions in Paris, in the form of one-time and targeted profits in Paris, and profit taking whose size must be considered in light of the initial progress, case by case.

We are still above the bullish slope and the 100-day moving average (in orange).

ban

In light of the major graphical factors we have identified, our opinion is neutral on the CAC 40 in the short term.

We will make sure to note that a cross of 7500.00 points will revive the buying tension. While breaking 7000.00 points will revive the selling pressure.

Hourly data graph

daily data chart

CAC 40: Small Alert Week One, Weekly Candle Watch (© ProRealTime.com)

© 2022 BFM Bourse

Leave a Reply

%d bloggers like this: