The main references on both sides of the continent, the EuroStoxx 50 and the S&P 500, await the appointment of the US Federal Reserve (Fed) with accumulated losses of almost 20%, that is to say, what in stock market jargon is called bearish territory, which is the environment in which markets that register drops of more than 20% go through. The European plaza, which fell to a 19.5% intraday, managed to alleviate their losses throughout the day and closed in a draw. The S&P, however, lost 19% with data at the European close.
The intensity of these fears, which have been listed on the stock market for days, is justified by the fact that many experts hope that, at tomorrow’s meeting, the body chaired by Jerome Powell to hike interest rates by up to one percentage point whole, with the aim of putting a stop to the runaway inflation plaguing the country. A movement that perpetuates the aggressive pace that the American central bank is setting this year, with four upward changes in 2022 and the last two of 75 basis points each. But this is not the only organization that will meet this week to update its monetary policy, since the central bank of Japan, Switzerland, Brazil and England.
From the annual highs that the S&P reached last January, this benchmark has lost more than 18%. A figure similar to that handled by the EuroStoxx, which also reached its annual sky in the first month of the year and has lost more than 21% since then.
By technical analysis, according to Joan Cabrero, advisor to Ecotrader, the loss of support in the North American indices “raises the possibility that they may once again seek support at the low zone for the year, such as 11,000 on the Nasdaq 100 and the 3,636 points of the S&P 500”. Thus, the expert points out that: “The North American market has formed a ceiling, I understand temporary, at the highs it marked in November 2021 and in the case of the S&P at the highs of January 2022. From there they correct positions in a movement which is serving to adjust the strong rise that originated in the lows of March 2020. As soon as this adjustment ends, everything points to Wall Street resuming its long-term upward trend”.
Regarding Europe, Cabrero indicates that, for the time being, “the stock markets of the Old Continent are managing to stay above the lows they marked two weeks ago and which were the origin of the last short-term rebound.” And he adds that, “as long as the EuroStoxx does not lose those minimums that it established at 3,450 points, I am reluctant to cancel the bullish reconstruction hypothesis that I have been managing.”
A ‘red’ month for stock markets
Going back to school is not doing particularly well for references from both sides of the pond, since only the Ibex 35 and the Italian FTSE remain positive (with 1.4% and 2.7%) in September. The problem of rising prices, added to the energy crisis and the geopolitical conflicts that grip the world continue to be the protagonists of 2022 and without letting up.
In this sense, the 35 club once again shows its strength compared to Europe in a month in which the banking sector has pulled the bandwagon, with a rise of more than 12% on average of the five entities banks since September 8, the day the European Central Bank announced the 75-point rise in interest rates.
However, the last few days have not been favorable for many of the stocks on the national market, with four of them (Amadeus, Cellnex, Rovi and Enagás) at their lowest for the year and the 70% of the companies to more than 15% of their maximums of the year.