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– Crash on the stock market, shares plunge
The CAC 40 has disappointed many equity investors this year. Let us judge: while the American stock market has experienced a historic surge (+26% for the S&P 500, +24% for the Nasdaq and +19% for the Dow Jones), the flagship stock index of the Stock Exchange of Paris fell by 5% (at the time of writing), a poor performance all the more disappointing given that since the beginning of January, the DAX (German counterpart of the CAC 40) has gained 15%, the BEL (Belgian stock index) 13%, the FTSE MIB (Milan Stock Exchange) 8% and the IBEX (Madrid Stock Exchange) 14%!
A marked divergence between the CAC 40 and the other stock markets on the planet, therefore, which is partly explained by the notable underperformance of the luxury giants (LVMH, Hermès and Kering, whose growth rate has clearly declined and whose the outlook is more uncertain, between Chinese consumers' reluctance and Donald Trump's trade war threats) and by the rise in French political risk, reflected since last spring in the surge in the spread between French 10-year rates and German (a gauge of the stress of the financial community in France, compared to the reference constituted by Germany, the leading economic power in the euro zone).
Stock market: why invest in stocks for the long term
Barnier government weakened, French rates worrying, S&P expected to turn the corner… The Paris Stock Exchange is feverish
Indeed, the dissolution of the National Assembly, the inability of the government to restore public finances, the deterioration of the French economy, the risks of dissolution of the Barnier government and the upcoming verdict (Friday November 29) of the agency S&P rating on France's rating have fueled the rise of concerns in France in recent months. And yet, “until recently, the financial community has been very patient with France», Judge Eric Dor, director of economic studies at the IESEG management school.
Until now, the liquidity of France's national debt, the solidity of our major banks, the strong diversification of the French economy, as well as the importance of French heritage and private income have been likely to reassure the rating agencies and the markets on France's capacity to bear the burden of our significant public debt, explains Eric Dor. But while the probability of the scenario of censorship by the Barnier government (and therefore of the impossibility of voting for a budget containing some measures to consolidate public finances) increases, the CAC 40 and the interest rate markets are starting to worry . In these conditions, in the coming days (and weeks), we will have to closely monitor the S&P verdict on France's rating and the trajectory of the rate gap between France and Germany…
What does technical analysis say about the prospects of the CAC 40?
From the point of view of technical analysis (analysis of the historical course of stock prices and mathematical indicators in order to develop the most probable scenario on the future trajectory of a share or another financial asset), the CAC 40 currently seems to be on a razor's edge. Indeed, it is currently testing the major bullish support consisting of the straight line connecting the major lows of October 2023 and August 2024, and currently passing towards 7,130 points, notes Robert Haddad, of SBA Bank, interviewed by Capital. If this major bullish support were to be broken for good (i.e. clearly and at the close of the session), we could fear a fall in the CAC 40 towards the objectives of 7,029 points and 6,773 points. , judges the expert, who specifies however that in the event of a confirmed rise beyond 7,130 points, this bearish scenario would be called into question.
© Robert Haddad (SBA Bank), with Bloomberg Finance data
– CAC 40: evolution of stock prices and technical analysis
Stock market: points to watch out for before investing in stocks
Readers of Momentum, Capital's investment letter, were able to avoid the plunge in the CAC 40
Readers of Momentum, the daily premium investment letter from Capital on the Stock Exchange, were warned Monday morning of the high risk of a relapse in the CAC 40. A plunge in the CAC 40 which materialized (-3% cumulatively less of three sessions, since the opening price of the stock market session of November 25, at the time of writing). Discover Momentum, whose selection of stocks on the stock market has had a better trajectory than the CAC 40 in recent years. And at this moment, exceptionally, take advantage of our offer Black Friday : by opting for an annual subscription, benefit from a 40% reduction! To take advantage of it, simply click on the link inserted above in this article.
