Sales have prevailed again this Monday. Consequently, the falls have once again been generalized in the different benchmark indices, although at the end of the day they have remained somewhat below 1%. The Spaniard has ended up losing 8,000 points, a level that has not dropped for a month. In addition, it has chained nine negative days, something that has not happened since November 2017. What is the reason for these massive losses? To the perspective of weighing down economic growth in order to curb inflation.
At the close of the session, the EuroStoxx 50 lost 0.92% to 3,570.51 points. The Ibex 35 also lost 0.92% to 7,989.6 points.
“The situation becomes much tougher” in the markets, Bankinter analysts say in their daily commentary. Variable income moves in an environment of “high uncertainty” and in a “”, explain the experts at Renta 4.
Investors are still digesting the ‘aggressive’ (or hawkish) message that Jerome Powell delivered on Friday at the Jackson Hole economic symposium. “”, assured the president of the Federal Reserve (Fed).
With , Powell showed that the US central bank will continue to raise interest rates firmly to curb the sharp rise in prices. The consumer price index (CPI) in both the US and Europe is at levels not seen in decades, . For this reason, the Fed will prioritize the fight against inflation, even if this implies weakening the growth of the economy, even when the United States.
“The Fed seems willing to sacrifice a little more growth and in exchange for being able to control prices, considering it insufficient to adopt a more dovish bias”, confirms Nuria Álvarez, financial analyst at Renta 4.
Goodbye to the ‘optimistic’ scenario
Jerome Powell has made investors discard the ‘optimistic’ economic scenario that they previously contemplated. US interest rates, currently , are now expected to rise to 3.75%-4% in the coming months and remain at that level for longer than expected. In other words: the recent ones vanish.
In addition, not only the president of the Federal Reserve showed his ‘hawk’ plumage in Jackson Hole. Also to this organism in front of the record inflation in the Old Continent, and with the greater pressure that the .
In fact, according to Reuters on Friday, different members of the Eurobank want it to be discussed at the next meeting on September 8. This is an unprecedented increase.
“In this way, the attitude of the central banks, which prioritize the control of inflation and their expectations over economic growth, will have to be from now on the base scenario with which investors ‘work'”, underline the Link Securities analysts.
The Ibex 35 chains nine days down
Thus the things, the pessimistic tone marks the session of this Monday in the bags. In Asia, the session was clearly negative: the Japanese Nikkei 225 closed with a drop of 2.7% and the South Korean Kospi fell 2.2%. In China the declines have been more moderate.
In the US the declines today are somewhat more measured after Wall Street, which completely conditions the behavior of the market on this side of the ‘pond’. The UK is the exception as the British stock market is closed today for a bank holiday.
The EuroStoxx 50, a reference in Europe, has distanced itself from the level of 3,600 points that it did save on Friday (intraday low: 3,537.2). Joan Cabrero, adviser to , highlights that the pan-European selective lost the support it had in the 3,640 units. “I do not rule out the possibility that we could see a fall to 3,515 points before seeing a bullish counterattack,” says the technical analyst of the specialized portal of this newspaper.
In the Spanish Ibex 35, the level to watch is at 7,940 integers, according to Cabrero. “It is the limit that the fall can be allowed not to speak of weakness and the possibility of attending falls to the support of 7,760”, he says.
The Spanish index today sealed its ninth consecutive day of setbacks, something that had not happened since November 2017. It has already lost everything it gained in . In fact, it has fallen below the level indicated by the Ecotrader expert.
Within the Ibex 35, the declines were the majority in a session in which ArcelorMittal achieved the best advance (+3.0%), followed by Sabadell (+1.77%), Repsol (+1.49%) and Acerinox ( +1.40%). The most pronounced setback was suffered by Solaria (-7.61%), ahead of Amadeus (-3.98%), Acciona Energía (-3.26%) and Meliá (-3.16%).
Attending to the companies with the largest capitalization, all were losses. Santander left 0.04%, BBVA 0.44%, Inditex 1.12%, Cellnex 1.18%, 1.37% and Naturgy 1.99%.