The markets are still subscribed to the lurch. Since the opening, the eyes were on the weekly unemployment figures in the US. The data has soared with the crisis to a new record, 3.28 million. But the number has been the trigger for Wall Street’s upward turn. The most pessimistic forecasts predicted up to 4 million and from the White House they consider the figures “irrelevant”. The new pull on Wall Street has brought European stocks out of the red. The Ibex, on its third day of rebounding, has added 1.31% to 7,033.20 points.
Once the billion-dollar stimuli that kept markets in suspense have been approved, analysts and investors evaluate whether these enormous amounts of stimuli will be enough to alleviate the historical slowdown that the world economy will register. The predictions of several firms coincide, raising the contraction of second-quarter GDP figures above 20% in most of the more developed countries.
To date, only some indicators such as the PMI figures have already quantified the real impact of the coronavirus crisis. The macro agenda for the day included the publication of US GDP (unchanged by + 2.1%), but as it was the last revision of the figures for the fourth quarter, long before the outbreak of the crisis, all attention was paid focused on other ‘smaller’ figures, those of weekly strike in the US. Analysts fired the range of possibilities in the data on requests for unemployment benefits during the last week. Finally, the subsidy requests have multiplied by more than ten, from 282,000 to 3,283 million. For the next few weeks, Citigroup does not rule out that the stoppage due to the coronavirus affects between 15% and 18% of the US active population, about 25 million workers.
Despite the bad data, the markets had already discounted it and the purchases returned to Wall Street compared to what the futures anticipated. The rebound on the other side of the Atlantic has allowed the main European squares to turn upward, although soon after, sales have prevailed in the Old Continent. The Ibex His attempted assault on the 7,000-point barrier is again frustrated, but is trading far from the intraday lows at 6,700 points.
Among the main values of the session stands out Grifols, with advances of 3.5%. The company, relieved in falls due to its defensive profile, gains momentum by agreeing in the US to study new therapies against coronavirus through the plasma of patients recovered after overcoming the disease. Investment firms see room for the rises, and Berenberg analysts have raised their valuation against the current, with a recommendation to ‘buy’.
Banking, the sector with the most weight in the Ibex, is trading with a mixed sign in a session in which Moody’s has downgraded its rating outlook on the whole of Spanish banking to ‘negative’. In addition, Berenberg, the most pessimistic investment firm in recent years about the evolution of Spanish banking, today digs the ground for its falls. It reviews the eight Spanish listed banks, and leaves the two biggest unemployed worse, Santander, which cuts 1.5%, and BBVA, which is 0.9%. Conversely, Bankia shoots up 9.3% and exceeds the euro per share and CaixaBank adds 2.2%.
The energy sector allows to moderate the downward pressures in the Ibex. The utilities once again show off their defensive profile, and values like Endesa (+ 5.3%), Naturgy (+ 2%) and Enagas (+ 1.2%) stand out in the advances. Among the strongest values is also Repsol (+ 2.4%), after announcing yesterday the cancellation of investments and part of the dividend.
The rest of European bags It also tries to close positive after trading at 2% cuts.
The Petroleum turn down again. The combination of a forthcoming increase in supply by Russia and Saudi Arabia with a record drop in demand due to the coronavirus gives rise to the more pessimistic forecasts about the evolution of the price of crude oil. Just yesterday, Citi lowered its average estimate for the barrel of Brent in the second quarter to $ 17, and did not rule out in its most bearish scenario a specific drop in negative prices due to the collapse of the stock storage infrastructure. The barrel of Brent is trading at the edge of $ 27, and West Texas, the benchmark in the US, is exchanged for $ 23.
Purchases reappear in Spanish debt and the profitability of the Spanish bond ten years down to 0.60%, with the interest of the German bund at -0.35%. The risk premium falls below 100 basis points.
In the foreign exchange market, the US currency continues to accuse the huge amount of dollars that the Federal Reserve and the White House will put into circulation. The dollar gives way, and the euro it goes up to $ 1.10. The pound moves away from 1985 lows when reaching $ 1.20.