Of course, November is not being a particularly rewarding month for investors. National equity markets are disappointing everyone. When everything indicated that an uptrend could open that it would last at least until the first months of 2018. But the only certainty is that it is not being this way. And if you have open positions in the stock market, you will be checking how the balance of your investment portfolio has decreased significantly during this period. But at least you can remedy this situation with respect to your relationships with the always complicated world of money.
Until now, the selective index of the national stock market, Ibex 35, would have been appreciated by just over 10%. In one year that was considered by financial analysts as very favorable for the interests of small and medium investors. Until November has arrived and the positive direction in the stock market has been distorted. If not totally but at least for the operations carried out for the shortest terms. In this article we are going to explain to you what are some of the causes that have generated this somewhat disturbing situation for Spanish savers
Because there is one thing very certain and that is that the Ibex 35 It has already been in negative territory for ten trading sessions. In other words, with constant and continuous falls in the first half of this month of November. And it is not only necessary to attribute them to the Catalan problem, but to other problems that are intimately linked to the economy and trade relations between the main countries of the planet. In order for you to have things a little clearer from now on, there will be no choice but to identify what have been the true reasons for this, for the moment, correction in prices.
Keys to an uncertain November
Of course, the Catalan process is one of the catalysts for this small collapse in the Spanish stock market. To the extent that capital outflows from our borders to choose other safer destinations have been very strong. On the other, it is one of the keys to explain the possible slowdown in the Spanish economy. Where and according to some highly relevant sources, growth in Gross Domestic Product (GDP) may decrease by a few tenths. What could stand at 2,4% as a consequence of this social and political problem. Not surprisingly, it is present in the feelings of a good part of investors.
On the other hand, a more negative scenario is also contemplated in which the accounts of Spanish companies could suffer. Something that is viewed with great horror by financial analysts. It's certainly a sobering scenario, but in no case irreversible Although it may take some time to find a solution to this conflict of political interest. It could even be, if the problem is solved, the warning signal for a bullish rally to start that could last several months. In any case, it is something that you must value if you are going to enter the equity markets.
Problems in the European Union
Another factor to explain these declines in the Spanish stock market during the month of November is due to the fact that the problems in the euro zone could increase during the next year. There is fear of a slowdown in the economy of this more than important economic zone. Aggravated by the fact that a foreseeable rise in interest rates by the European Central Bank (ECB). That could be the trigger for new and continued equities in the old continent. It will be another of the parameters that you should take into account if you are thinking of taking positions from these precise moments. Do not forget it to avoid making mistakes in any of the operations carried out.
On the other hand, you should not forget that any economic growth review in the euro zone, it may derail positive expectations for equity markets in the old continent. Some of this has to do with the latest crashes. In the sense that some international organizations have lowered the growth progression in this important economic area. Although it is very difficult to assess its intensity and how far the corrections can go. What is really worrying is that a trend change was generated. Going from bullish or even sideways to bearish. This would be without a doubt the most dangerous scenario for your financial interests.
Change in interest rate policy
There is no doubt that a possible rate hike it could do a lot of damage to the European stock market. With hardly any stimuli from the European Central Bank (ECB). From this general scenario, there is no doubt that the rumors of an interest rate hike in the euro zone could be influencing the fact that this month of November is being bearish for the Ibex 35. Because in addition the other European indices are in the same trend than Spanish. It is a fear generated by different financial agents, who see this monetary measure very close. To the point that you think it may be close right now.
As all investors are well aware, equity markets often anticipate these events with great intensity. Where this well-known axiom of selling with the rumor and buying with the news usually applies. Perhaps it is an investment strategy that you can apply from now on, not without some difficulties. Due to the volatility that the stock market may present during the next few days. Where excessive oscillations can be generated in the formation of prices. Especially in some sectors, such as banking.
Lower profits in companies
Another of the variants that can explain this bad month that is being November is that the business profits are reduced from now on. And in this sense, this adverse scenario is being discounted for the interests of Spanish equities. In fact, there is already more than one notice in this regard, as has been shown in the latest business results. Where some companies are already beginning to notice a frank deterioration in their accounts. Something that could be enhanced even in the last quarter. In any case, it will be a factor that must be present in your operations.
On the other hand, you cannot forget that Spanish companies have achieved very powerful results and it will be very difficult to maintain these accounting margins with the same intensity. Of course, it is something that you have to take into account if you think that it is time to take positions in some of the securities that are listed on the Spanish continuous market. Where caution should be one of your main common denominators. Much more than the technical and even fundamental aspect of the stock market proposals. Where it may cost you more effort to make the savings profitable as in other exercises.
Excessive rises in recent years
Another factor that weighs in on this very bad beginning of November is the realization that there has already been a very strong rise for many years. Practically since the economic crisis developed in 2007. And now is the time for a change in trend. Or at least stronger than usual corrections occur. This is a variable that enhances this development of Spanish equities during this month of November. Although it will be necessary to verify how it is its evolution at the end of the month. In case there was a reaction from the financial markets. Something that can happen are also no problem.
If this was really the real scenario, you would have no choice but to squeeze your males because falls could intensify from now on. And much more if the change in trend is a reality that marks the financial markets. Especially if it is accompanied by movements of the same characteristics of other stock indices in our geographical environment. It will, therefore, be a new clue that the financial markets will give to decide if it is the ideal time to buy or sell your positions on the national stock market. Although knowing that you will run many risks, and certainly much more than those generated in previous months.
As a positive element in the investment is the fact that the long-awaited christmas rally. Where purchases are clearly imposed on sales as a result of optimism on the part of small and medium investors. Not surprisingly, this very special movement takes place almost every year and with practically no exception.
It usually takes place during the month of December and sometimes lasts until the first weeks of January. Now we will have to check if it is also a reality at the end of the year. So that in this way, you are in a better position to improve the balance of your checking account. With more or less intensity, although you have more to gain than lose in these special situations of the year.