Wage inflation and the S&P 500: labor costs will take on more prominence in the future

21/09/2021 – 8:30 Updated: 09:08 – 09/21/21

The spirits tempered this Tuesday in the stock markets of Europe and Wall Street after the strong losses at the start of the week due to the collapse of the Chinese real estate company Evergrande. The main European indices force the rebound. Sales have also been moderated in the open parks of the company itself. giant Asia, the blow arriving late in Japan, which was closed for public holidays this Monday.

The market thus assumes that “there is no systemic risk”, despite the size of Evergrande, with more than 200,000 employees and 300,000 million dollars of debt. “His fall could be a warning for the rest of the real estate sector to control its leverage”, they affirm in Allianz Global Investors.

The Chinese giant left another 5% on the Hong Kong stock exchange on Tuesday. “We do not expect the government to give him any direct support.”, says S&P. “We believe that Beijing will only be forced to intervene if there is a wide-ranging contagion that causes the failure of several companies in the sector and poses systemic risks to the economy,” the rating agency said.

Volatility before the sum of factors

The peak in the pace of economic recovery, the global supply crisis, doubts about the withdrawal of monetary stimuli from central banks due to inflationary pressures and finally the fall of Evergrande made the Vix or fear index, which measures volatility implied by the S&P 500, it shot up to 26.85 points, a level not seen since May.

The risk at a technical level in Europe is “falls of an additional 5/6% towards the area of ​​3,800 / 3,900 points of the EuroStoxx 50, the scope of which we will see a priori as an unbeatable opportunity to buy back the European stock market”, says Joan Cabrero , Ecotrader strategist.

“Until the zone of lows in May and July at 3,800 / 3,900 points, it seems difficult that the falls could be slowed down despite the fact that we are watching an intermediate support at 4,000 integers that could cause a rebound,” he continues.

The focus of the market shifts to the Fed

The meeting of the Federal Reserve Open Markets Committee (FOMC) will have chicha. On the one hand, the language of the final statement that will be published this Wednesday will undergo changes that will bring closer the beginning of the reduction in the purchase of debt. On the other, the update of the economic table and the dot-plot (also known as dot-plot) will extend its projections until 2024, when the top officials of the United States central bank expect the price of money to reach a range of 1.625%, in four climbs.

IAG rises strongly

On the other hand, if there is a sector in the stock market that has lived with indifference the situation of collapse of the Chinese promoter Evergrande, it was tourism, which after echoing the news from the Financial Times that on November 1 the United States will lift restrictions on European and British passengers with the complete vaccination schedule, starred in the rises of the European park.

The most bullish value this Monday was the Anglo-Spanish holding company IAG -after entering La Cartera de the Economist-, which rebounded by about 11% after its CEO, Luis Gallego, ruled out on Sunday a capital increase as the German Lufthansa will do and after communicating an Erte among Iberia employees on Monday for organizational and productive reasons.

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