Aug. 2 () –
The Ibex 35 has ended the week with a fall of 4.4%, going from the level of 11,100 points with which it started on Monday to the level of 10,600 points at which it closed this Friday. Today alone it has lost 1.67%.
Analyst Joaquín Robles points out that the Madrid index has gone from being close to a new annual high to falling to the “lowest” levels since the end of April. However, it has managed to accumulate a return of over 7% so far this year.
“Volatility has soared as concerns about the U.S. economy grow and some major technology companies fail to meet expectations,” including Amazon and Intel.
“Much of the strength the market has shown this year has been based on the confidence of a ‘soft landing’, where central banks would be able to stabilise inflation without leading the economy into a sharp contraction,” adds the expert.
The main reference on Friday was the non-agricultural employment report in the US for the month of July, when the American economy generated 114,000 new jobs, a figure much lower than the 179,000 created in June, while the unemployment rate rose two-tenths, to 4.3%.
Robles said investors are considering the possibility that the US Federal Reserve (Fed) waited “too long” to cut rates and that now, instead, the country’s economy is facing a “hard landing,” which involves a slowdown or recession after a period of rapid growth.
In fact, one of the main references of the week has been the Fed meeting, in which the president of the central bank, Jerome Powell, stated that an interest rate cut could come “as soon as the next meeting” in September.
The Bank of England also cut rates for the first time since 2020, although it warned that it will be very cautious and will not cut rates further too quickly, while the Bank of Japan raised rates by 25 basis points and will halve bond purchases over a two-year period. The weak yen has precipitated this move.
The Eurozone CPI rose to 2.6% in July, a figure that will not change the stance of the European Central Bank (ECB), but which demonstrates, according to Robles, the difficulty of controlling inflation.
“On the business front, the banking sector has been hit hard by the collapse, which, despite good results, has been dragged down by fears that a rapid economic slowdown could slow demand for credit and increase provisions. IAG soared on the stock market after announcing that it was abandoning the purchase of Air Europa and would restore its dividend. Fluidra also rebounded strongly after its second quarter results helped to reassure investors worried about the poor performance of its competitors,” explains the analyst.
During the next week, Robles points out that there could be a drop in trading volume due to the start of the holiday period, so that there could be some episodes of increased volatility.
Among the most relevant data are the services PMI and new jobless claims in the US. The corporate earnings season is also entering its final stretch. Among the most relevant companies are Berkshire Hathaway, Walt Disney and Ely Lilly.
Returning to the Ibex 35, its performance in this last session of the week closed at 10,672.9 points, with IAG as the bullish value, rising by 3.32%. Behind it were Redeia (+2.75%), Endesa (+2.50%), Cellnex (+2.35%) and Naturgy (+2.00%). On the other hand, the biggest falls were those of Rovi (-7.21%), CaixaBank (-5.81%), Bankinter (-5.40%), Santander (-4.90%), Sabadell (-4.15%) and BBVA (-3.65%).
The rest of the European indices also registered falls at the close: Milan lost 2.55% on the day; Frankfurt, 2.33%, Paris, 1.61% and London, 1.31%. In addition, Wall Street was trading in the red with falls of 2.39% on the Nasdaq, 2.10% on the S&P500 and 1.95% on the Dow Jones.
On the commodities market, a barrel of Brent crude oil was at $77.01, down 3.18%, while West Texas Intermediate (WTI) crude oil was at $73.65, down 3.49%.
On the debt market, the yield on Spanish 10-year bonds was 3.055%, slightly down from 3.092% at the close on Thursday. The risk premium on German debt was thus 84.7 basis points.
As regards currencies, the euro appreciated by 1.08% against the dollar, reaching an exchange rate of 1.0907 ‘greenbacks’ for each unit of the common currency.
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