CAC 40 & Euro Stoxx 50 Outlook:
- The Euro[1] Stoxx 50 may enjoy newfound stability after reports were released on Friday that suggest the US has officially taken automobile tariffs off the table[2]
- Similarly, the CAC 40[3] could look to extend its recent rally on the back of the news
- Still, the news may have been partially priced in already, causing subsequent gains to be derived from the removal of uncertainty more so than a decidedly bullish development
CAC 40 & Euro Stoxx 50 Outlooks Enjoy Boost from Auto Tariff Deadline
A report from Norway’s Minister of Industry suggests the United States will not pursue auto tariffs on the European Union[4], removing a key uncertainty facing the Euro Stoxx 50 and the CAC 40. Consequently, the two indices could look to extend their recent rallies as the newfound stability could allow tailwinds – like more accommodative monetary policy – to push European stocks higher still. With that in mind, here are the levels to watch in the week ahead.
CAC 40 Price Chart: Monthly Time Frame (January 2000 – November 2019) (Chart 1)
Enjoying a rally of more than 26% in the year-to-date, the CAC 40 boasts one of the better performances among the major stock indices. Now, the French equity index finds itself at the highest level since July 2007, with swing-highs from the decade prior coming into view. Thus, the index’s next area of substantial resistance may reside around 6,160.
CAC 40 Price Chart: Daily Time Frame (October 2017 – November 2019) (Chart 2)
In the shorter term, the CAC could look to employ the ascending trendline from December for further gains. While the level has seen its influence fluctuate over time, recent price
