CAC 40 forecast for December 2022

The CAC 40 index had a strong recovery in November as global stocks jumped. It rose to €6,733, which was about 19% above the lowest level this year. The current price is the highest level since April this year. 

France stocks rebound

The CAC 40 index bounced back in November as investors anticipated a pivot by major central banks like the Federal Reserve and the European Central Bank (ECB).


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This rebound accelerated after the US published encouraging inflation data. As we wrote in this report, the headline consumer price index (CPI) declined from 8.3% in September to 7.7% in October. Core inflation, on the other hand, dropped to 6.3%. 

Minutes published by the Federal Open Market Committee (FOMC) showed that most officials favoured slowing the pace of rate increases in the coming meetings. 

Further, with the yield curve inversion falling to the lowest level in more than three decades, there is a possibility that the Fed will actually cut interest rates if a recession happens. Historically, yield curve inversion is the best predictor of a recession.

European inflation has also eased in the past few weeks as natural gas prices have retreated. Gas price have slumped since European countries have adequate in storage. Data published on Wednesday showed that the headline inflation dropped from 0.6% in October to 0.0% in November.

The CAC 40 index recovery has been led by companies across all sectors. Luxury brands like Kering, Hermes, and Louis Vuitton have surged by more than 10%. Kering, the parent of Gucci, has risen by 21.41%.

Other companies like Alstom, STMicroelectronics, BNP Paribas have rallied by over 10%. On the other hand, the top laggards in the index were Teleperformance, Thales, Sanofi, and Danone have retreated by more than 5%.

CAC 40 forecast

CAC index by TradingView

The daily chart shows that the CAC index has been in a strong bullish trend in the past few weeks. It has risen above the 25-day and 50-day moving averages. The index moved above the important resistance level at €6,590, which was the highest level on August 19. 

The Relative Strength Index (RSI) and the Stochastic Oscillator have continued rising. It also rallied to the 61.8% Fibonacci Retracement level. Therefore, the index will likely continue rising in November as buyers target the key resistance at €7,000.

Source: https://invezz.com/news/2022/11/30/cac-40-forecast-for-december-2022/