Thursday’s appointment of the European Central Bank (ECB) has not prevented – just one stock market session – the Ibex 35 registering in October (with 7.5%) its most bullish month since November 2020, also known as Saint Pfizer, since it was when the pharmaceutical company announced an effectiveness greater than 90% of what was the first vaccine against Covid-19. The same happens with Europe, which, for the moment, exceeds the gains it registered in July, which until then was its most bullish month of the year, with 8.9%.
Despite the nervousness that this type of event usually arouses on the floor, the markets had already discounted a large part of what would happen in this meeting, which, moreover, did not go beyond the established script, with a new rise in 75 basis points –which leaves interest rates at 2%, from the previous 1.25%– and the tightening of conditions for the banking sector.
However, despite the fact that most of the stock markets remained positive on Thursday, sales prevailed in the early hours on the Old Continent, although the EuroStoxx and Dax finally closed with a tepid advance of 0.24% and the Dax with 0.46%.
However, in the computation of the week, all European markets close with advances of more than 3%, with the Ibex as the most bullish, with 4.9%, and also marking its best week of the last five months. By values, the ones that have advanced the most in the last five days are Cellnex, with 13.7%, followed by Endesa and Acciona, with 12.3% and 11.4%, respectively. On the other side of the table are CaixaBank and ArcelorMittal, which are the most bearish of the week with losses of 5.9% and 3.9%.
As a technician, Joan Cabrero, adviser to Ecotrader, explains: “The rebound that the Ibex develops from the low zone of March around 7,287 points (analogous to the 22,500 of the Ibex with dividends) remains completely valid, especially after the Spanish selective has managed to recover the old support zone of 7,765 points and break the downward acceleration guideline that arose from uniting the highs of August and September, which was around 7,800 points”. Thus, the expert adds that “the reach of the low zone of 2012 around 5,800-5,900 points has managed to stop the downward trend that defines the Ibex 35 over the last few years. This support environment has been a long-term floor and the point of origin of an upward trend in the coming years whose first objectives are to return to pre-Covid levels of 10,100 points,” he concludes.
The expectation that the possible rate hike ceiling will not be as high as expected is one of the reasons why October has been a boost for the shares of the main European stock markets, which manage to hold on positively after leaving behind a September black. This can also be seen through the Spanish reference, which is already rebounding 9% from the bottom it touched on October 12, with more than 17 values in this interval with gains of more than 10%.
Wall Street also succeeds in the month, with a rise of 1.5%
As for the fixed income market, which on Thursday also bought the pessimistic tone of the ECB and, with it, the possible slowdown in the rise in the price of money, yesterday it was bathed in red again, with sales as the protagonists. The German bund rose 14 basis points and remains around 2.10%. The Spanish paper, for its part, also had a rise of 14.6 basis points in the session on Friday and reached 3.15%. The American T-Note started with sales as the protagonists and stood at around 4%, at the close of the European market.
Thus, with a session ending in October, Wall Street also came out on top in the month, with a rise of 1.5%, at the close of the European market, which led it to register its second most bullish month of the year, behind July. From its lows, the S&P advances 7.6%. The Nasdaq, for its part, continues to struggle to stop its fall, since the disappointing results of the third quarter of some of its giants such as Alphabet, Microsoft, Meta or Amazon drag their shares down.
A strengthened euro
Regarding the currency market, this week the euro showed great vitality against the dollar, and managed to recover parity on the eve of the ECB. In yesterday’s session it lost some strength and was around 0.99. The Brentthe reference for crude oil in Europe, has risen 2% in the last five days and yesterday it closed at $95.36 per barrel.