The Ibex 35 closes with a weekly rise of 0.7% and recovers 11,100 points in the wake of results

Jul 26. () –

The Ibex 35 closed the week with a rise of 0.71%, reaching 11,165.9 points, driven by corporate results, especially those of banks, and the publication of important macroeconomic references, such as the PCE inflation rate in the United States, which is of great importance to the Federal Reserve (Fed).

The Spanish index has spent the last five days balancing between 11,100 and 11,200 points, although it has finally settled at the first level after a Friday in which it even put it in danger, as it has escaped losses in the last stretch – this day the Ibex has closed with a modest rise of 0.18%.

According to data consulted by Europa Press, the main indicator of the Spanish market has accumulated a revaluation of 10.53% so far this year.

Regarding the performance of the Spanish stock market this week, market analyst Manuel Pinto has focused on the business sector: “Banks continue to positively surprise the markets by publishing their results.”

In this regard, he cited Banco Santander (earned 15.6% more in the first half of the year) and Banco Sabadell (earned 40% more until June) for the good evolution of the interest margin thanks to high interest rates, the increase in credit or resources and a drop in the non-performing loans data.

In addition, Pinto continued in relation to Sabadell, that the Catalan entity has wanted to counteract BBVA’s takeover bid in some way by increasing the remuneration to its shareholders, which will go from 2.4 billion euros to 2.9 billion euros: “the management wants to let its shareholders know that it is willing to fight to remain an independent entity.”

On the other hand, beyond the banking entities, energy companies such as Repsol (profits increased by 14.5%), Iberdrola (profits increased by 64%) and Endesa (profits decreased by 9%), which sold 49% of its solar business in Spain, also stood out during the week.

Within the Ibex 35, the most notable gains this week were Mapfre (+4.44%), Rovi (+4.42%), Acciona (+4.28%), Iberdrola (+3.91%), Naturgy (+3.74%), Acerinox (+2.81%), Sabadell (+2.62%), Banco Santander (+2.15%), BBVA (+1.57%) and Endesa (+1.55%). On the other hand, the most penalised were Bankinter (-2.73%), Aena (-2.37%), Repsol (-2.03%), IAG (-2%), Unicaja (-1.91%), Indra (-1.8%) and Puig, which in its debut week on the Ibex has lost 1.27%.

As for the companies that have been hit the hardest, according to Pinto, this is due to doubts in the accounts of the tourism sector and, in the case of IAG, the possible rejection by the European Commission of its merger with Air Europa, while Puig has been affected by the falls in the luxury sector in Europe.

Apart from the European luxury sector, the week has been particularly marked by the evolution of the American technology industry: “The major American technology companies are disappointing in the current earnings season, favouring the rotation to small-cap stocks or, in general, to ‘value’ companies,” explained Pinto.

This capital transfer was evident on the Wall Street trading floor: the Dow Jones industrial index rose more than 1% in the week, while the Nasdaq technology index lost more than 2%.

“Markets are beginning to question the return on investment in Artificial Intelligence (AI),” added the experts at Renta 4.

On the Old Continent, the performance of the stock markets has been uneven: Paris has lost 0.22% and Milan 1.18% during the week, while Frankfurt has risen 1.35% and London 1.39%.

As for the macroeconomic agenda, the United States’ references have stood out this week: on the one hand, PCE inflation stood at 2.5% year-on-year in June, one-tenth less than in May, although the underlying inflation – which excludes food and energy – was higher than expected; on the other hand, the country’s GDP grew by 2.8% in the last quarter, well above expectations, although the savings rate continues to fall.

“With these data, the market is assuming that the Fed will cut rates in September,” Pinto said.

In Spain, the Active Population Survey (EPA) for the second quarter of the year was noteworthy, with unemployment falling by 222,600 people, which is almost 7.5% less than in the previous quarter, while employment increased by 434,700 jobs (+2%).

At the end of June, the total number of unemployed people stood at 2,755,300 people, with the unemployment rate at 11.27%, the lowest since 2008, with a decrease of more than one point in the last quarter. At the same time, the number of employed people reached a new historical high, with 21,684,700 workers.

On the commodities market, the price of a barrel of Brent crude oil, the benchmark in the Old Continent, fell by 1.8% over the week to $81.1, while the price of a barrel of WTI crude oil in Texas fell by 1.9% to $77.1.

As for currencies, the euro depreciated by 0.2% in the week against the dollar, reaching an exchange rate of 1.0862 ‘greenbacks’, while in the debt market the Spanish ten-year bond closed at 3.225% after -with hardly any change in the week-, with the risk premium (the differential with the German bond) at 82 points.

The price of a troy ounce of gold fell 0.6% this week to $2,385, although it reached an all-time high of $2,483 on July 17 due to the prospect of a first rate cut by the Fed in September. The precious metal has appreciated by nearly 20% this year.

Meanwhile, Bitcoin has gained almost 0.9% this week, reaching $67,600 per cryptocurrency.

KEY POINTS FOR NEXT WEEK

Next week will be crucial, said Pinto, when it comes to remembering that large companies will present their results, such as Apple or Microsoft in the United States, in addition to the Federal Reserve’s (Fed) monetary policy meeting.

In Spain, it will be the turn of companies such as Telefónica, Grifols, IAG or BBVA.