The fear of recession eats 8% of the Stock Market

by time news

Palace of the Bowls of Madrid. / R. C.

The Ibex-35 goes from 8,842 to 8,145 points since June 9, when the ECB confirmed that it will raise interest rates in July

Clara Dawn

You have to accept it. 2022 is not being a quiet year for investors in the Spanish Stock Market. The global uncertainty and the difficulties in preparing forecasts are weighing heavily on the mood of the market, which this week has once again experienced episodes of strong corrections that, among other things, have left the S&P500 on Wall Street in bearish territory. In other words, the index has already lost more than 20% since its last maximum reached in early January.

In the Spanish market, the turmoil has been especially notable since last June 9, when the ECB confirmed that it will raise interest rates in July. Then came the Fed’s 75 basis point hike, the Bank of England’s fifth in a row, and – one of the most surprising – the Swiss’s first in 15 years. This trend suggests that Europe will have to be more aggressive in its monetary policies in order not to be left behind. So investors have beaten retreat and, since that last ECB meeting, the Ibex-35 has lost 7.9% of its value, returning to a negative balance of 6.5% in the year. Yeso that on Friday recovered part of what was lost by rising 0.8%.

The consensus considers that, from now on, it will be necessary to see whether or not analysts begin to drastically revise their earnings estimates for the companies most exposed to the economic cycle. Something that, for the moment, has not occurred. So, after the sharp declines in many listed companies, investors could take the opportunity to return to the floor. But beware. “Let’s not get carried away by apparently attractive prices. At least not yet », Bankinter analysts explain. In his opinion, the strategy should be “protect and not risk”. Yalertan: «It is difficult for investor sentiment to turn for the better immediately. Inflation is the main risk for the economy and companies (pressure on margins). And the tightening of monetary policy has just started and will put pressure on profits due to the higher cost of financing.

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