The agreement between England and the European Union on the application of Brexit and the general budgets that the Italian government must present will be determining elements for the evolution of the equity markets in the last week of November. In principle, everything seems to indicate that it will start from the upward path because everything seems that these problems can settle in a satisfactory way for the interests of small and medium investors. After a week in which the national benchmark index, the Ibex 35, dropped a little more than 1,50% in the five trading sessions.
On the other hand, this week the business confidence index will be released IFO from Germany and the Eurozone, while the US will issue three- and six-month bonds and two-year notes. They will be other very relevant that will determine, in one sense or another, the path that will take, not only the Spanish stock market, but the rest of the world. And that in any case, it will accompany how the financial markets digest the important agreements that have been discussed at the European Union summit on Brexit and that was held this weekend.
While on the contrary, and with respect to the United States economy, all eyes will be directed to the manufacturing business index of the Dallas Fed and whose forecasts point to levels of 105,90 levels. Another of the most relevant data for this geographic area is the one that refers to the Chicago Fed's national activity index, which will also be released this week. therefore, there is a lot of data that small and medium investors will have to digest so that they can take the most opportune positions to make their personal assets profitable.
Brexit: should prop up the stock market
The agreement reached on Britain's exit from the European Union is expected to be a more than effective trigger for shares in listed securities to rise after the latest declines in recent months. Not in vain, some of the most relevant analysts in the financial markets point out that it may start in the development of the traditional christmas party rally. Although as retail investors know well, the reaction of the financial markets is really unpredictable since it is usually bought with the rumors and sold when the news is confirmed. Will it be the same situation in this case?
On the other hand, surely there will be some stocks that will be more sensitive to this kind of news. Both in one sense and in the other, as has happened in recent years. At one time of year, optimism in financial markets may be the common denominator in many of the listed securities. In the next sessions the different financial agents will leave doubts, both to make purchases and sale of shares on the stock market. When there is just one month left until the end of this troublesome year for equity markets.
Approval of the English Parliament
In any case, the biggest problem for an advance in the stock markets will depend on the future approval of the British Parliament of the meeting held with the governing bodies of the European Union. Therefore, there will be no choice but to measure the operations carried out very well. Because in effect, the first reaction of the stock markets this Monday was clearly bullish, with an appreciation of the Ibex 35 around 2%. It is the banks who have led this rise after the heavy punishment received in the past weeks. The advances of Sabadell, BBVA, Bankia or Santander have been above that marked by other sectors of the variable income.
This reaction of the financial markets has led the selective index of the Spanish stock market to be caressing levels of 9.200 points. Although in the coming days its development would be crucial to show whether it is just a one-off rebound or something much more concrete that can take this reference source of the stock market to higher heights. Where one of the major reference points will be the strong support it has at 9.500 points and that could even lead to a higher part of the price.
A fix to the Italian problem is expected
With regard to the budget sent to Brussels by the government of Italy, now everything seems to indicate that it is a transalpine strategy to achieve better conditions to negotiate its debt. However, a couple of weeks will still have to pass to see what the reality of this very special situation is that the community institutions are going through. If fixed, it could definitely become another strong boost for European income to generate another upward pull before the end of the year.
One of the great beneficiaries of this situation will undoubtedly be the banks that could end the year better than they started. Not in vain, it is one of the sectors that has left the most euros on the road during these almost twelve months. With declines in some stock indices above 10%. To the point that it is one of the segments in the financial markets with the worst recommendation by financial analysts. With a tip to underweight and that has led to sales clearly outweighing purchases.
Risk of major falls
In any case, not all financial analysts are so optimistic about the evolution of the Spanish stock market for the last days of the year. But, on the contrary, they think that the Ibex 35 may reach levels very close to those in the near future. 7.000 or 7.500 points, which would place this benchmark in one of the lowest in recent years. With the added risk that the downtrend may be much more bearish than previously anticipated. With regard to all terms: short, medium and long and beyond other technical considerations and perhaps also from a fundamental point of view.
Waiting for what might happen, one of the levels to watch over the next few days is the very relevant of the 8.500 points. It is precisely where it stopped in the last drop that it experienced in the first days of November. Because if it is exceeded, without a doubt, the depreciations in Spanish equities may be more intense and comply with the more pessimistic scenario posed by financial analysts. Despite the fact that business results for the last quarter have not been disappointing.
Waiting for the Christmas present
Within this general context, all small and medium investors are waiting for the expected rally of these Christmas holidays to land. It is very frequent that it appears these days, but not always as it happened in the past year, to the disappointment of the thousands and thousands of investors who want to enter the financial markets during these days before the entrance of Christmas. Where the price of the shares can revalue around an average of 8%. It is not surprising, therefore, that a large part of them are waiting for their appearance to carry out their operations and thus make the savings profitable in a very short space of time.
Where the most aggressive sectors will be the ones with the best performance in this very bullish period. Or, failing that, those values that have depreciated the most during this year. Where again the banks They play a decisive role in leading the increases and lowering the discount they are currently trading at a bit. On the other hand, technological values are others that have the ballots to show greater advances in their price. To the detriment of defensive companies and all those that act as safe havens at times of greatest instability in financial markets.
Good time for investment
However, December and January have traditionally been two very positive months for equity markets. This is something that a good part of small and medium investors count on to end the year well. Even if it is not a fixed rule that it is always fulfilled and this is a factor that you should take into account so as not to take some displeasure from now on.
In one of the most complex years for international stock exchanges in recent decades. Where the Ibex 35 will probably end with double-digit declines. Although there is no lack of market analysts who think that after a course as negative as this, it is followed by large revaluations in the valuation of stock prices.