The fear of a recession swallows 8% of the stock market


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

You have to accept it. 2022 will not be a quiet year for investors in the Spanish stock market. Global uncertainty and the difficulties in forecasting are weighing on the mood of the market, which this week has seen further episodes of strong corrections that, among other things, have left the S&P 500 on Wall Street in bearish territory. In other words, the index has already lost more than 20% since its last high reached in early January.

The turmoil in the Spanish market has been particularly noticeable since 9 June last year, 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’ first in 15 years. This trend suggests that Europe will have to be more aggressive in its monetary policy in order not to lag behind. So investors have retreated 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. Yes, that Friday recovered some of what was lost by rising 0.8%.

The consensus believes that from now on it will be necessary to see if analysts drastically revise their earnings estimates for the companies most exposed to the economic cycle. Something that hasn’t happened yet. So, after the sharp declines in many publicly traded companies, investors could take the opportunity to return to the floor. But watch out. “Let’s not get carried away by apparently attractive prices. At least not yet,” explain Bankinter analysts. In his opinion, the strategy should be “protect and not risk”. Yalertan: “It is difficult for investor sentiment to benefit immediately Inflation is the main risk to the economy and businesses (margin pressure), and monetary policy tightening has only just begun and will weigh on earnings due to higher borrowing costs.

Source: La Verdad


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