CAC 40: Below two major resistance levels

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A continuation of nervous oscillations between now and the next FOMC meeting remains the preferred option at this stage, as investors struggle to decipher the trajectory of the American economy. The latest benchmark, which has not provided the necessary clarification: the NFP (Non Farm Payrolls), the monthly federal report for the month of August on private employment, published on Friday.

He delivered mixed messages in the trading rooms. Indeed, everything depends on the angle of assessment: that of the health of the American economy, or that of the Fed’s propensity to begin or not its process of lowering federal rates by -25 or -50 basis points in two weeks.

Because if the unemployment rate remains stable at 4.2% of the active population, the number of job creations in the private sector (excluding agriculture) comes to 142,000, well below the target. So, of course, the result is not as bad as in July (114,000), but it rekindles the debate on the nature of the landing of the American economy. In other words, the soft landing, and a fortiori the kiss landing, is no longer so relevant. Finally, the average hourly wage, at +0.4%, exceeds the consensus.

The CAC 40 closed Friday down 1.07% at 7,352, the lowest in a week with a largely negative balance (-3.65%).

Fed Governor Christopher Waller said the current employment data demanded “action,” Bloomberg reported. He also said he was “open” about the size of the rate cut needed.

This week, investors will be watching the European Central Bank (ECB) meeting. Deutsche Bank expects the European institution to cut rates by 25 basis points.

Finally, let us note that the market remained cool to the appointment of Michel Barnier to Matignon. The former minister of François Mitterrand, Jacques Chirac and Nicolas Sarkozy, former European Commissioner, succeeds Gabriel Attal. The septuagenarian will have to demonstrate his negotiating skills – let us recall that he was in charge of Brexit negotiations in Brussels – to form his government initially, then get down to drawing up a budget for France.

On the stock front, Elis fell 15.7% after Reuters reported that the company had approached American Vestis with a view to a potential acquisition. This frightened the market given the size of this target. Rubis, for its part, dropped 10.85% after publishing results which, according to Oddo BHF, confirm “a lack of momentum (of good dynamics, editor’s note)”.

On the other side of the Atlantic, the main stock indices closed the last session in the red, like the Dow Jones (-1.01%) and the Nasdaq Composite (-2.55%). The S&P, the benchmark barometer of risk appetite in the eyes of fund managers, contracted by 1.73% to 5,408 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 1,1070$. The barrel of WTI, one of the barometers of risk appetite on financial markets, was trading around 68,00$.

On the agenda this Monday, to follow in priority the Sentix index of investor confidence in the Eurozone at 10:30 a.m. and the stocks of American wholesalers at 4:00 p.m.

KEY GRAPHIC ELEMENTS

The key short-term chart levels were precisely hit: Friday, August 30 at 7,645 points, followed by a failure; and Wednesday, September 4 at 7,482 points, a handful of points from the 7,465 points below which a new bearish leg would form. This last level experienced a first alert on Thursday, September 5.

The fact that the leading French index ended at the lowest level of week 36, just after breaking the threshold, is decisive. It sends a message of short-term weakness.