This coming Monday marks exactly one year since the start of open war between Israel and Palestine. On October 7, 2023, a Hamas attack against Israeli citizens sparked the outbreak of war in a region where, for years, the peace He was hanging from a wire that had been cut that day.
Initially, with the start of Israeli attacks on Gaza soil, the market reacted with moderate declines in the stock market and capital flows into safer assets such as debt and gold. Also oil, which in this case responded with price increases due to doubts about supplies from the Middle East, surpassing the 92 dollars per barrel that marked the material’s ceiling last year.
But beyond this initial tension, which led the stock markets to reach lows at the end of the month, the markets demonstrated that the conflict in the Middle East had and has a very limited influence on investor sentiment. Since then, a rise in the prices of risky assets such as stocks has begun.
Stock markets did not react immediately to the conflict in the Middle East and the peak decline did not occur until a few weeks later. Was on October 27 when the main European and North American indices reached record lows which have not yet been drilled. However, it did not take much effort for the indices to recover from this correction and their prices are already far from these levels, with a rebound of 22% on average for the stock markets of the Old Continent and of almost 40% on Wall Street. .
On this side of puddlehe The Ibex 35 and the German Dax have increased the most since the October 2023 lows, with more than 30% in both cases.. The French CAC, on the other hand, is the one which has appreciated the least since, up 12% compared to current levels. A slower pace which, more than the war, is due to the fall that companies in the luxury sector have suffered this year, due to the weakness of Chinese consumption and the great weight they have on the market Parisian.
On Wall Street, this conflict has been even less cited, with an increase of 40% for the technological Nasdaq since the minimum of this month of October and of almost 39% for the S&P 500. And the fact is that the stocks in Overall are having a good year, with indices such as those in North America reaching historic trading levels and others like the EuroStoxx within a short distance of surpassing them. Despite the conflict, the year 2023 also ended with a more than positive balance in the main indices, with gains of 20.3% for the S&P 500 and 12.8% for the Stoxx 600.
Beyond geopolitical tensions that could intensify with Iran’s intervention in the conflict this week, stock markets are reaching this moment with a greater focus on expectations of central bank rate cuts and updates inflation and growth data from major economies than what is happening around. the Red Sea.
In this context, the markets now anticipate that the ECB will reduce the benchmark interest rate in the euro zone by an additional 50 basis points, to 3.5%, while for the Fed, expectations are a little more aggressive and were not excluded. the reduction until the end of 2024 is 75 points. In this sense, it should be remembered that this Friday the employment data for September will be published, which have become one of the key indicators for calibrating and anticipating the monetary policy of the North American organization.
The buying zone is approaching
From a technical point of view, after reaching the highest points of the year barely a week ago, the markets are consolidating part of the increase accumulated in recent months. As for Europe, “the picture of recent weeks is clearly optimistic and invites take advantage of a next decline towards 4,850/4,900 points increase its positions on the European stock market by managing a stop to the September lows of 4,732 points, which should not be lost to continue to have confidence in a short/medium term bullish context,” explains Joan Cabrero, Ecotrader advisor.
On the other side of the Atlantic, sales are also putting pressure on Wall Street in recent days. “We are seeing a decline that should serve to digest part of the recent strong increases, after which I understand that the upward trend will continue to prevail,” adds Cabrero. “A further decline will not be worrying until the September lows are lost, which in the case of the Nasdaq are at 18,400 points. If from there the technology index manages to join the trend of the S&P 500 and to reach new historical highs “this would form a new trio of aces which would be a clearly winning hand in favor of bullish continuity in the months to come”, concludes the expert
The values that make the best and worst of the Ibex 35
By values, and in Spanish key, 20 companies from 35 clubs have revalued by more than 20% since October 27, 2023. Since that date, in fact, only six companies are in the negative, with Acciona Energía in the red lanternswith losses of almost 18%. Leading the way in this ranking is Inditex, with an increase of almost 60%. The textile company is among the companies that managed to revalidate their historic price peaks on different days throughout this year, reaching the historic level of 50 euros and a capitalization that managed to exceed 160 billion euros, a figure never recorded by a listed Spanish company.
Since then, Banco Sabadell has taken second place, with an increase of almost 58%. In its case, the public purchase offer launched by BBVA in May this year greatly boosted its shares, and it is also the most optimistic company on the Ibex 35 in 2024.
Merlin Properties comes third, with an increase of 47%. The Spanish company SOCIMI is among the companies that have benefited from the reduction in rates – and from expectations of an acceleration of this reduction process in Europe – because it is a company with more debt due to the very nature of the real estate sector.
