Advances 0.37% in the week
November 18 () –
The Ibex 35 has recovered the level of 8,100 points in the session this Friday after recording an advance of 1.08% in the session and 0.37% in the week.
This week the confirmed CPI data for the euro area corresponding to October was released. According to the first estimate published by the Community Statistics Office, the year-on-year inflation rate in the euro area stood at 10.7% in October, which marks a new all-time record and represents an acceleration of eight tenths compared to the figure for September, despite the rises in interest rates undertaken by the European Central Bank (ECB).
On the other hand, the president of the Federal Reserve of St. Louis and member of the US Federal Reserve (Fed), James Bullard, downgraded yesterday the optimism that the markets had shown last week after knowing the inflation data in the US, which moderated its advance in October to 7.7%. Bullard said the Fed could push rates as low as 5% to 5.25% in 2023, 25 basis points above what has been discounted so far, due to “persistently high” inflation.
“The markets have had a busy week and, however, when it comes to the stock indices they have obtained few gains if we compare it with other weeks. Although there have been extremes where the EuroStoxx50 led the rises, the Ibex has been the less bullish, closing the week practically flat. Of course, keeping the 8,000 points, the level with which investors expect to end the year,” said XTB analyst Darío García.
The week ended with the intervention of the president of the European Central Bank (ECB), Christine Lagarde, who pointed out that the threat of a recession in the euro zone is more intense now, despite the fact that the growth data for the economy have been better than expected, which is why he considers it “vital” to demonstrate the institution’s commitment to its price stability mandate.
In addition, he recalled that historical experience suggests that a recession is unlikely to significantly reduce inflation, at least in the short term, so it is “vital” that the ECB shows commitment to its mandate to ensure that inflation expectations are remain anchored and there are no second round effects.
“Christine Lagarde pointed out that the ECB is due to its mandate to contain inflation above other economic indicators and that, if it has to choose between growth and price stability, it will not hesitate to give priority to the latter objective, that is to say , interest rate rises”, explained the XTB analyst.
Throughout the week, the companies that performed best were those in the banking and energy sectors, while the tourism, pharmaceutical and steel sectors corrected strongly. “Banks won hard on Bullard’s tougher words from the Fed, who is targeting rates between 5% and 7% for next year, along with Lagarde and her more aggressiveness on the ECB’s main target.” , point out from XTB.
In the Ibex 35, this Friday’s session ended at 8,127.8 points, with Bankinter (+4.53%), Santander (+3.02%), Endesa (+2.67%), CaixaBank (+2, 35%), BBVA (+2.18%) and Inditex (+2.12%) at the head of the promotions.
On the contrary, Acciona (-3.01%), Amadeus (-1.72%), Acciona Energía (-0.94%), Meliá (-0.68%), Merlin ( -0.67%), Solaria (-0.62%), Cellnex (-0.6%), Repsol (-0.25%) and Grifols (-0.08%).
The rest of the European stock markets also ended Friday’s session positively, with increases of 0.53% in London, 1.04% in Paris, 1.16% in Frankfurt and 1.38% in Milan.
Likewise, a barrel of Brent quality oil, a reference for the Old Continent, stood at 86.95 dollars, with a fall of 3.15%, while Texas stood at 78.83 dollars, with a decrease of 3.44%.
Finally, the price of the euro against the dollar stood at 1.0345 ‘greenbacks’, while the Spanish risk premium stood at 101 basis points, with the interest required on the ten-year bond at 2.999%.
Next week investors will be watching industry PMI indices for Germany, the Eurozone, Spain, the United Kingdom and the United States. In addition, the minutes of the latest meetings of both the Fed and the ECB “will generate some interest among investors, by reflecting all the content of the latest decisions”, so some details that were not revealed at that time could be known, it has stated Dario Garcia.
