New Black Friday for the equity market. The week, which began with moderate sales in the European stock markets, ended with intense falls that left both the main European reference, the EuroStoxx, and the German Dax at lows for the year, and the Ibex fell to 2020 levels on Friday, with a decrease of 2.29%, 1.9% and 2.46%, respectively. Thus, the main western markets closed the week with falls above 3%.
For the Spanish index, which has lost nearly 5% in the last five days, it is about the worst week since last March 4, the date on which the war between Russia and Ukraine broke out and left the national market with losses of up to 9%. However, the fall of yesterday’s session led the selective to pierce its key supports, located in 7,765 points. “As these supports fall, everything points to the fact that the downward correction of recent months could deepen another 10%”, highlights Joan Cabrero, technical analyst and adviser at Ecotrader. The perforation of key supports opens up a scenario of deepening falls towards the intraday low zone of last March at 7,288 points in the case of the Ibex, points out the expert, who adds: “And I am very much afraid that [el Ibex] I might even seek the psychological support of the 7,000 integers.”
These reference levels were also blown up in the trading session on Friday for the EuroStoxx 50 Total Return (with dividends) and the Dax (which already includes them in its calculation), located in the 7,500 points for the reference of the Old Continent and in the 12,400 points for German. And now, after the crash, as Cabrero indicates, “the EuroStoxx could seek the 3,000 point zone.” Thus, both markets enter the bear market environment again, with accumulated falls in the year that exceed 20% in both cases.
And it is that, despite the fact that the opening of the session on Friday was relatively calm, the red of the bags began to intensify after the publication of Preliminary September PMIs for Germany and France, since the first GDP indicators for the third quarter have come out worse than expected and anticipate that the euro zone has started the recession. It should be remembered that the drop to these lows comes after a week marked by the tightening of monetary policy by different central banks. Among them, the Federal Reserve that decided to raise the price of money by 75 basis pointsup to levels of 3.25%, maximums of 2009, and anticipated that they will reach 4.5%.
But this Black Friday was not just hanging over the equity market. Bonds, oil and the euro also fell on this day to the lowest levels of the year. Sales soared in fixed income, with the T-Note reaching yields of 3.70% and the German Bund of 2.02%. The price of Brent, the reference for crude oil in Europe, fell to 85.7 dollars. In the foreign exchange market, the single currency continues to move away from parity and the euro was below 0.98 dollars throughout the day.
Less than 5% of minimum
A third of the Ibex 35 companies have been located at a distance less than 5% of the annual minimums following the latest market capitulation on Friday. And up to 14 firms are within a drop of less than 10%. Fluidra, Grifols, Inmobiliaria Colonial, Cellnex Telecom, Aena, IAG, Merlin Properties, Meliá Hotels, Amadeus and Rovi appear at the bottom of the table. That is, tourism and highly indebted firms such as real estate, which in Europe fell 11% in the week and another 8% in tourism and travel.
There have only been two values that have escaped the losses in the week within the Ibex: Sabadell and Bankinter, and they do it with a maximum gain of 4.6%. In fact, since the last meeting of the ECB, which led to the rebound of the banks, the five of the Ibex are still positive, with profits ranging from 10% for Bankinter to 3% for Santander. Among the losers are Grifols and Solaria, with a fall of close to 14% in the last five days, Colonial, Merlin and Sacyr, above 11%, and Meliá, 10%.
With the bleeding of sales on Friday, the real estate sector and European retail accumulate losses that are greater than 42%, the largest since 2008, in the midst of the collapse of Lehman Brothers.