The era of zero rates ended on Thursday when the ECB bowed to speculation and raised, for the first time in eleven years, interest rates by 50 basis points, the largest increase in more than two decades. A decision that was not noticed in the European marketdespite the fact that at the weekly close it presented notable rebounds.
To this event, we must also add the next meeting of the American Federal Reserve (Fed) convened for July 27, during which it is planned a further rate hike of at least 75 basis points, to continue to fight against inflation, which also continues to rage in the United States -the latest data for the month of June amounted to 9.1%, the highest figure since 1981-. After the body’s first hike in June – it raised rates by 75 basis points, the biggest increase in 28 years – with this new interest rate in the United States already set at 1.75 point -it started interest rates on the 0.25 points.
Thus, the market dyed green in a week where the rebounds have been intense on both sides of the Atlantic. In Europe, the Ibex and the Italian index suffered more contained increases – in part, mitigated by the difficult conditions of the anti-fragmentation tool proposed by the ECB and Italy, moreover, due to the departure of Draghi and the call of the elections – in both cases with advances of 1.3%. The EuroStoxx recovered about 3.4% of its value in the last five days, being the continent’s most bullish index during the week. They also highlighted the advances of Dax and Cac which showed gains of 3.02% and 3% respectively.
However, the bottom of the pit has yet to be seen and the major markets, mostly still under resistance, have not ruled out the risk of seeing deep falls. The EuroStoxx failed again in its attempt to overcome its resistance placed by Ecotrader adviser Joan Cabrero at 3,600 points. Once overcome, “the possibility of eventually seeing the loss of the March lows would disappear and pose an upside counterattack that could target the 4,025-point zone in the coming weeks, where the slump ended. last rebound, with an intermediate resistance in the 3,850 points”, underlines the expert. Despite this, he adds that “operationally, exceeding 3,600 points does not invite to put a second foot on the stock market or to increase exposure with force but yes to peck in search of opportunities to take advantage of a predictable rebound”.
Wall Street also contributed to the rebounds. At the European close, its main selectives such as the S&P 500 and the Nasdaq 100 pointed revaluations greater than 3% in both cases, although it should be remembered that both indices continue to be in bear markets.
Pharma Mar, the star of the week
Pharma Mar He was the undisputed leader of the week within an ibex in which 85% of his values managed to place themselves in the positive field. Buoyed by the approval in China of one of its cancer drugs, the drugmaker rose Monday by 7.6%, gains with which he not only leads the week but also ibexes in the year, with a lead of 26.7%. The rises of 7.1% and 5.6% for Arcelor and Acerinox closed podium of the week.
On the other side of the table, Telefónica was the hardest hit with losses up to 5.88%, followed by Mapfre with a drop of 3.58%. Declines for the rest of the week were smaller, coming in at less than 1%.
Buying prevailed in the bond market at the weekly close. The peripheral bonds of Italy and Spain, after rebounding to yields of 3.5% and 2.5% respectively after the ECB announcementboth fell more than 22 basis points at the Friday meeting. They finally closed the week with returns of 3.3% in the Italian case and 2.3% in the Spanish case. The dyke The German was down 19 basis points from the start of the week and ended with a return of 1%. Compared to the more than 3% the US bond touched on Monday, it was down around 2.8% in mid-trading on Friday, losing up to a total of 19 basis points since Monday.
The euro recovered 1.6% driven by the drag on the dollar after experiencing the drop in the PMI. Since hitting parity with the dollar on July 14, rebounds about 2% and in the middle of the session it reached 1.02 dollars.
