Even though the Ibex 35 closed yesterday above 11,800 points, the index has already fallen to 11,500 points and is now playing for this level (it also lost 11,500 intraday). The Spanish selection falls to one 2.7%, its biggest daily drop in 2024 and since the banking crisis of March 2023, after the hangover left by Donald Trump’s victory in the American elections on the markets. The indicator is trading at 11,514 points, lowest in two months. The reverse of the coin is a Wall Street at historic highs.
Acciona is the bottom of the session – with a drop of more than 7% – but it is not the only one to record big drops. Sabadell records a drop of almost 7%, BBVA falls by 6.6%, Acciona Energía by 5.9% or Salaria by 4.8%, among others. The biggest victims are the energy and banking sectors, the most exposed to the possible negative effects of the Republican victory. The financial sector operates in the United States and Latin America. This is the case of BBVA in Mexico, where the Republican victory is already valued in the currency pair to the detriment of the Mexican peso.
In addition to the poor outlook for the currencies of emerging countries, there are fears that companies in these countries will be penalized by a drop in exports and that this will harm banking activity. Additionally, there are concerns about Trump’s renewable energy policies because the leader is a climate change denier.
Even though the Ibex 35 started the day in the red, the losses only worsened. However, in Europe the reaction was different. The main continental indices rose sharply at the start of the session, but gradually moderated, until completely erasing promotions and returning to sales. The EuroStoxx 50 fell 0.6% to 4,837 points and the Dax fell 0.4% to 19,200 points. The euro is another damaged asset and is down almost 2% against the dollar. The European currency is trading at $1.07 and is experiencing its worst session since 2020.
What the markets fear is Trump, since the President of the United States for his second term has anticipated a policy in which your country (and its economy) prevails above all else (MAGA, Make America Great Again), which implies, for example, customs duties or a drop in exports from the euro zone to America.
In Europe, car manufacturers are collapsing. BMV loses 7.4%, Mercedes loses 6.5%, Volkswagen 5.3%. Here again, there are concerns that Trump’s focus on the domestic auto industry will make it very difficult for EU businesses to compete.
The opposite reflection of this situation is occurring on Wall Street. The increases start from 2% and the Dow Jones advances by 3% and exceeds 43,500 units, unprecedented heights. The Republican will favor everything or almost everything that has American DNA. The S&P 500 also hits a record high of 5,900. The Nasdaq 100 rebounds 1.7% and touches never-before-seen levels above 20,550 points.
In addition to protectionism, the president should pursue a more expansionary fiscal policy. This caused a real collapse of the American debt, T-note, whose profitability increased by 19 basis points, to 4.46%, a four-month high.
