Orphaned by the United States this day for a public holiday. Continued alignment of the planets for Europe which continues to outperform.
Inflation is dead. long live inflation
So at the moment who says lower rates, lower dollar means higher flows to Europe, gold/silver, emerging markets (Asia/LATAM) but also a lot of protection through bonds.
It is this notion that is important going forward as we attack the results of companies that may demonstrate resilience but whose leaders’ prospects may be cooling.
While at the macro level everything seems on the table and more or less valued. The market should refocus on corporate fundamentals and therefore on the micro.
The rest of the macro will just be where you put your cursor on the ecological recession and its strength and the inflation recession and its strength.
Indeed, we have welcomed the decline in long-term rates and the fact that central banks will limit the increase in their rates in the future. But the big question will remain: can disinflation continue at this pace or start declining less and thus create fear that we will miss the 2% target.
We will answer in two ways. Or possibly raising the central banks’ inflation target to 3% instead of 2. Or keeping rates at current levels for a longer period. This will bring back the idea that flows into bonds can ultimately compete with stocks.
A fluctuating period that on the stock market can be called construction that will last as long as we have the data that will allow us to decide.
I discussed the topic at length. But we must avoid killing inflation too quickly and think in terms of a linear increase going forward. This is part of the transition and exposed sine wave.
All of this will take time.
So, in my opinion, we shouldn’t get carried away with the markets or believe that it’s a trap. It’s transition. And motion correction will set up the construction which I think will validate this idea of having to zigzag time to digest this sub-wave and set up the next.
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CAC 40 analysis
RAS, we’re stuck a little below 7040 but the US isn’t there. We will avoid drawing conclusions. For me, the short-term support is at 6930. Above it, we can definitely consolidate, catch our breath, but not reverse the trend. The medium-term pivot is at 6800-6850 points.
If we come back to this, we need not panic and cry wolf. We will have to think about a healthy retracement and underneath a build wave as explained above.
It’s important to understand that in the stock market, trends that take time to build are more durable.
Graphseo stock portfolio
Nothing on the wallet today. The CAC 40 is up 8% since the beginning of the year. I do the same without beating it after the reduction of my capital.
I hold the exposure as long as we hold 6940 on the cac and 11200 on the Nasdaq. I’ll be more on consolidation, so I’ll continue to weight tech stocks to play for the extension of a catch-up bounce at home.
When the market will be calmed down by the Fed, who will explain that nothing has been done and it will be right, a slightly weaker disinflation figure will be enough to relaunch the debate whether inflation will certainly come down but will stop at 3 -4% instead of the 2 that wishes. all of this will take longer.
And we will only have the answer in 2024. In the meantime, the market will zigzag in anticipation.