CAC 40: The stock market is starting to creak on its hinges

(BFM Bourse) – The entire BFM Bourse analysis team wishes our community of readers and investors an excellent and fruitful 2023. While 2022 turned creaking on its hinges, the sources of concern for this beginning of the year remain strong, especially in light of the explosion of ​​Covid-19 cases in mainland China, measured by growing fears of a return to drastic measures to shut down the world’s factories. It is this severe strain on supply chains in an economy that is still largely globalized that could be a major brake on risk-taking at the turn of the year.

For all of 2022, the CAC 40 finally lost 9.5%, its worst annual performance since 2018, when it had fallen nearly 11% (10.95%). A decline that stands in stark contrast to the recovery recorded last year of almost 29%.

Inflation barometers, particularly on the US employment front, will be scrutinized this week. The contents of Friday’s monthly report (NFP for No agricultural wages) will provide valuable insight. The market expects unemployment to stabilize at 3.7% of the active population and a slowdown in the pace of wage increases in the private sector (excluding agriculture) to +0.4% per month.

In terms of statistics on Friday, the Chicago PMI came in markedly higher at 44.9, well above expectations. No US statistics are expected on Monday, while Wall Street will remain closed into the new year. Here you will find all the non-working days on Wall Street in 2023.

On the stock side on Friday, industrial heavyweights and the luxury sector symbolically reinforced the decline in the flagship index, such as LVMH (-2.38% to 679.9 euros), Hermès (-2.69% to 1,445 points), Eramet (-3.01%). to 83.85 euros), or Michelin (-3.04% to 25,985 euros).

On the other side of the Atlantic, the main stock indices ended the last session of the year in the red within narrow margins, such as the Dow Jones (-0.22% to 33,147 points) or the Nasdaq Composite (-0.11% to 10,466 points). ). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, fell 0.25% to 3,839 points.

A point about the other risky asset classes: around 08.00 this morning on the foreign exchange market, the common currency was trading at a level close to $1.0680. The barrel of WTI, one of the barometers of risk appetite in the financial markets, traded around $80.40.

To be followed as a priority on the macroeconomic agenda on Monday, a battery of industrial PMIs, in final data for December, in the Eurozone.

KEY GRAPHIC ELEMENTS

The three-color index traced in one session the entire amplitude of the consolidation figure above 6,550 points, the integrity of which was threatened. The close on Thursday 12/15 was very close to the lows of the session and the strength of the volumes came to lend credence to the possibility of a break at the end of this threshold. First attempt on Friday, with validation of the quantities.

If the trade association is not yet there, the technical signal being sent is clearly negative.

In the immediate future, the withdrawal on Wednesday 12/21 needs to be invalidated or finally confirmed to send any useful signal. It has been confirmed twice so far. The relative trajectories of two notable moving averages also send a warning signal.

FORECAST

In light of the key graphical factors that we have identified, our view is neutral on the CAC 40 index in the short term.

We will be aware that a crossing of 6550.00 points would revive the excitement in the purchase. While a break of 6390.00 points would restart selling pressure.

Hourly Data Chart

Chart in daily data

CAC 40: The stock market year begins to creak on the hinges (© ProRealTime.com)

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