Comings and goings on the Ibex this Thursday. Now trading again with moderate upgrades promoted by Telefónica and Inditex, which compensate for falls in banks. The operator has reacted to the news that the TUE has removed the O2 sale veto to Hutchison, veto that prevented the operation from closing in 2016 and that was a setback for the company.
Both the Spanish team and the rest of the European places continue to want to go up, but they move in an “uncertain positive context”, as CMC Markets points out. On the one hand, they want to continue adding positions, receiving with joy any progress related to the coronavirus.
On the other hand, no one escapes that much remains to be seen in terms of the economic impact of the pandemic, that there is a risk of a re-emergence of the virus and that there are a number of added problems –the protests in Hong Kong, the tensions between China and the US or the uncertainty about Brexit when a new round of negotiations begins- that are being ignored.
The Ibex attacked in the last day the highs of April (7,210 points) and finally ended below that level. Today it has tried to overcome them again and it has deflated.
“Ideally, it should exceed these prices, if possible, in weekly candles, because somehow these types of closings are more forceful, more reliable. And if it did, only then, We will start to think about 7,440 points (38.2%), 8,000 points (50%) and 8,350 points (61.8% adjustment and weekly bearish gap). Summarizing, the feelings are still good but the most important thing is missing, to confirm above the April highs with ease, “explains José María Rodríguez, analyst at Bolsamanía.
Wall Street ended positive on Wednesday, with gains above 2% in the Dow. It was a somewhat convulsive session, in which the positive feeling ran into issues that weighed negatively.
An afternoon headline from the South China Morning Post, saying that China is ready to strike back at the US for any punitive action regarding Hong Kong, pressed the indices across the Atlantic. However, they quickly recovered to close green for the third consecutive day. The Dow and the S & P500 finished above the psychological levels of 25,000 and 3,000 points, respectively.
In Asia, the day has ended with a mixed sign, with sharp falls in the Hong Kong stock market.
This Thursday the European Commission’s plan to allocate 750,000 million to recover the area from the pandemic continues. Of that money, it is calculated that 140,000 million would be for Spain. “While the markets have reacted as if it were an important moment for Europe, the sums at stake are negligible in the general scheme of things, given the magnitude of the economic shock, especially since no money will be available immediately. There is also the prospect that the amounts declared will probably be diluted, and even if the money is released, it will probably be so little that it will be completely insignificant“explains Michael Hewson, chief analyst at CMC Markets in London.
Across the Atlantic, the Federal Reserve Beige Book published yesterday pointed to further deterioration of economic conditions, with moderate price pressures, being the most affected sectors of leisure and hospitality. The only glimmer of hope was evidence of a rebound in New York, with a very uncertain outlook.
Furthermore, the latest revision of the US GDP has turned out to be even more bleak. The world’s largest economy has contracted 5% through March, up from 4.8% anticipated in the first reading published several weeks ago.
Regarding aspects of the day’s agenda, the Spanish CPI deepens its fall in May to -1% due to gasoline and the Covid-19 effect. Preliminary CPI for May in Germany is up 0.6%, in line with expectations and compared to the previous 0.9%. On the other side of the Atlantic we will know the last revision of the GDP for the first quarter of the US, which was -4.8% in its initial publication a few weeks ago. Weekly jobless claims will also be published.
Finally, in our country, the market is also attentive Nissan, which has finally confirmed the closure of its factory in Barcelona.