The selective suffers fears of the economic slowdown in anticipation of the rise in US debt interest rates
European stock markets are taking the bearish baton from Wall Street and the Ibex-35 is up a further 0.6% on the fifth consecutive day of declines, taking the indicator’s chart to 7,364 points. Pessimism and recession fears are once again strong among investors, who are not expected to make any major moves ahead of the release this week of the US CPI, which will undoubtedly mark the Fed’s next monetary policy decision.
Early in the session, most stocks in the national stock market were in the red, led by Caixabank (-1.94%), Acerinox (-1.8%), Repsol (-1.79%), BBVA (- 1.73). %), Grifols (-1.57%), Sabadell (-1.52%) and Santander (-1.52%).
Fears of an economic downturn rose late Monday after Fed Vice Chairman Lael Brainard made it clear that rate hikes will go as high as necessary to end runaway inflation. A few words that have once again raised the cost of borrowing in the debt markets, where bond yields, which move inversely to price, are again rising close to this year’s highs.
The yield of the ten-year American bond is again close to 4%, while in Europe that of the German bond at the same maturity is around 2.3%. In the Spanish case, the reference to ten years is quoted at 3.5%.
It’s not just about inflation or a restrictive monetary policy to curb it, the pace of which is frightening because of its impact on the recovery. Investors have other open fronts, such as the entrenching of the war in Ukraine or the slowdown in China, to which is now added fears that the earnings season, which kicks off on Wall Street at the end of the week, will be worse than expected.
Added to all this is the US government’s decision to restrict exports of technology, primarily semiconductors, to China, said Link Securities analysts.
It was precisely this situation that was responsible for the index of companies in the sector, the PHLX Semiconductor Index, which fell 3.5% on Monday, slowing its decline to 40% for the year. A situation also carried over to the Nasdaq Composite, which closed at its lowest level since July 2020.
In the commodities market, the price of oil is repeating its decline, with a barrel of Brent, a benchmark in Europe, trading at about $95. In contrast, American West Texas is around $89.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
