Monetary policy continues to move the markets and there is no better example than these last two weeks. After the new rate cut by the European Central Bank (ECB), this week it is the turn of the American Federal Reserve (Fed). The decision of the American central bank was even more sensitive than that of the European bank, since the organization began the reduction of rates and did so with the doubts of investors and experts about the magnitude of the reduction.
Finally, the Fed decided to make a massive cut, that is, cut interest rates by 50 basis points in one fell swoop. This is not the first time the organization has taken this action, since throughout this century, the central bank has done so on 18 different occasions. But this time it was different since the Fed’s goal was to continue its soft landing strategy, overcoming the recession and without hampering employment.
“By cutting 50 basis points instead of 25, the Fed is signaling its confidence that inflation will be on a sustainable path toward 2%. And it appears to demonstrate its determination to achieve a soft landing by preventing a labor market slowdown from occurring. “The labor market is in a strong position and we want to keep it that way, and so is the economy,” Fed Chairman Jerome Powell said at his post-meeting press conference. Bringing forward the cuts increases the chances that the economy will remain strong,” said Donald Ellenberger, senior vice president at Federated Hermes.
Thus, the major global indices also close the Fed week with a quadruple witching hour (when futures and options on indices and stocks expire at the same time and tend to generate unusually high trading volume). The weekly calculation leaves the gains at a general level, but it is he Ibex 35 the one who stands out once again among all the selective oneseven on the Americans. The Spanish index closes with increases in the last five days of more than 2% and confirms new highs for the year at 11,753 points.
In the rest of the stock markets of the Old Continent, the increases since Monday are in fact moderate and barely reach 1%. The London Stock Exchange even closed the week with a drop of half a point, following the decision of the Bank of England (BoE), which did not let itself be carried away by the ECB and the Fed and decided to keep interest rates intact at 5%.
With this week’s gains, the Ibex 35’s gains for the year already reach 16.5% and it remains the most bullish index on the European continent and is getting closer to fighting with the heavyweights of Wall Street. Despite this, at a technical level, Joan Cabrero, advisor to Ecotrader, warns that if a possible correction occurs, it must not give way below the support that he places at 11,465 points “if we want to continue to trust in a context of bullish continuity in the coming weeks”, he explains and adds that “in this sense, there is no resistance to highlight until the highs of 2015 and 2010 at 11,884/12,240 points”.
On the other side of the Atlantic, Wall Street indices are recording weekly increases of slightly more than 1%. These new increases have served the S&P 500 to set new historic highs and the Nasdaq 100 is on its way. Among the major big technologyMeta’s price has also reached new highs in its entire history and the company still has upside potential for the following months.
In Spanish territory, this week, the progress of BBVA, IAG, ArcelorMittal and Acerinox has stood out. The Basque financial entity has recorded an increase of close to 6% since Monday, in which it is his best week since AprilThe Spanish-British airline also benefited from increases of more than 5% (in September alone, the company appreciated by 14%) and the steel companies signed a balance sheet in five days of around 4.5% in both cases.
On the other side of the table, up to six values of the national selection correct more than 2% of their value in the week, but none reach the collapse that they suffered. Acciona Energía shares have lost almost 6% of their value since MondayIndra and Endesa are the second most bearish companies, with respective declines of 2.7% and 2.5%.
In the commodities market, and given the uncertainty surrounding the Fed, gold prices have again recorded a new all-time high and have appreciated this week by more than 1%. Oil is also experiencing its most bullish week since the beginning of August, with an increase of almost 4% that puts the price of a barrel above 74 dollars.
