Monday, March 27, 2023
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Stock market starts the week in the red on big central banks, CPI and “witching hour”


The Ibex 35 index was down 0.3 per cent on Monday at 8,270 points. Some prices have increased, including Telefónica. Today is the last day to buy Telefónica shares with the right to receive a dividend that the operator will distribute on the 15th. This will gross EUR 0.15 per share which will be paid entirely in cash. It will distribute a total of 900 million euros. Negative Inditex, which will publish the results on Wednesday.

Today the Technical Advisory Committee of Ibex 35 will review the structure of this indicator. Their decision will be known after the market closes. Investors expect PharmaMar to leave and be replaced by Logista. In addition, Siemens Gamesa shares will be delisted from Ibex on the 14th when the acceptance period for the buyout offer launched by its parent company expires tomorrow, Tuesday. Siemens Energy offers 18.05 euros for each share of its subsidiary. As of Wednesday, Ibex will temporarily have 34 values.

This week will undoubtedly be one of the most tense and intense of the year for the financial markets. Important inflation data will be published in the coming days and the European Central Bank, Federal Reserve and Bank of England. In all cases, a half point increase in the value of money is expected.

The appointment with the reserve is on the 14th. The latest known employment and activity data suggest that the US economy “needs” higher interest rates over a longer period of time to reduce inflation. Just before the Reserve Council on the 13th, the inflation data for the previous month will be released in that country. US Treasury Secretary Janet Yellen expects a substantial reduction in inflation in 2023. The majority opinion points to a half-point increase in the price of money, after four consecutive increases of three-quarters of a point. But nothing has been ruled out as of now. The big question is at what level the Fed stops monetary tightening. Analysts expect that level to stay at 5 percent, so there will still be two more half-point increases at the December and February meetings. The other big question is how long does it keep the value of money elevated. The market fears that this will be a prolonged one.

For its part, the European Central Bank will meet with its Council on the 15th. It is also expected to raise the reference rate by half a point to 2.5 per cent. Analysts don’t think it will take them more than 3 percent. The next government councils are scheduled for 2 February and 16 March. The ECB cannot influence economic activity very much. Analysts expect the Eurozone to enter recession by registering negative growth in this quarter and the next. Although Spain would be spared “by a hair”. According to analysts, the Bank of England will also raise its benchmark interest rate by 50 basis points this week.

But this week there is more. Tomorrow Germany’s inflation will be known together with the CPI of America. As per the latest known figures, this shows an alarming increase of 10 per cent. Furthermore, the Spanish Treasury will be back in the market on Tuesday and the 13th looking for funding. This will hold letters at 3 and 9 months. This will be the last auction of the year, as the placement of bonds and obligations scheduled for the 15th has been cancelled. The public treasury has already covered its emissions this year.

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