CAC 40: no reason to consider a change in trend – 09/23/2022 at 08:33


The Palais Brongniart, former headquarters of the Paris Stock Exchange. (photo credit: / L. Grassin)

(CercleFinance.com) – The Paris Stock Exchange is expected without much change on Friday at the start of a session which will be mainly dominated by the publication of the latest PMI surveys on private sector activity in Europe.

Around 8:15 a.m., the ‘futures’ contract on the CAC 40 index – October delivery – advanced by 25.5 points to 5946.5 points, suggesting a timid rebound after the correction of the last few days.

The Paris market ended yesterday’s session with a decline of 1.9%, to 5918 points, in a context of general decline following the offensive comments made by the Fed on Wednesday evening.

At this stage of the week, the CAC shows a weekly decline of around 2.6% and the technical indicators remain too weak for the moment to foresee a positive fundamental movement, warn the chartists.

According to analysts, the breakout of 5980 points could even prefigure a relapse on the floor of 5795/5800 points, likely to lead in turn to a retracement of the annual low of 5750 points, which acts as a ‘force of attraction ‘ to use the words of the Kiplink Finance teams.

In New York, US equity markets ended in the red again on Thursday after a session in which investors were able to see that inflation remained a major source of concern for the Federal Reserve, at the risk of dragging the economy into recession.

Inflation, which is slow to normalize, therefore continues to worry Fed decision-makers, which is pushing the greenback up to around 0.98 against the euro.

The questions surrounding the action of the American central bank also supported the yields of Treasuries, that of 10-year paper now evolving at peaks since the financial crisis, at more than 3.70%.

Under these conditions, investors should be careful not to take too many risks while waiting for the publication, during the morning, of the latest European PMI indices.

With soaring energy prices, rapidly rising interest rates and slowing global growth, the euro zone’s composite PMI fell back below 50 points in August.

For economists at Oddo BHF, this key indicator of activity “has every reason to weaken further” in September.

‘The base case scenario remains recession,’ warns the private bank in a recent research note.

The day will also be marked by the publication of the US PMI, which should also sink a little further into a dangerous zone, again confirming the reality of the recessionary threat across the Atlantic.

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