The main bags in Europe are backing this Tuesday. Except the Italian, which is driven by the bank. After starting the week with a positive tone, fear of the impact of the coronavirus returns to dominate in most of the parks before the forecasts cut by the technology giant Apple. Thus, the EuroStoxx 50 It distances itself from its resistance. The IBEX 35 it registers smooth descents, although it endangers the 10,000 points it reached yesterday. The indicators of investor confidence in the Eurozone have been the 'macro' references highlighted on the day.
Although Wall Street closed on Monday for a holiday in the United States, Manzana He gave bad news last night. The apple giant announced that it will not meet its revenue forecasts in the first quarter of the year, although it did not offer new estimates. Its shares anticipate 4% falls in the North American market.
The underlying reason is the impact on your business of the Covid-19 outbreak in China. The Asian country represents 17% of its sales and 70% of its production, as noted by the Department of Income Analysis 4 in its daily report. “The risk is that the impact of the coronavirus will be transferred to the second trimester,” these experts add.
“Investors must face an uncertain scenario for several months”
In a comment on Monday, Talib Sheikh, an analyst with the management company Jupiter AM, said that “investors must face an uncertain scenario for several months” in the face of this new epidemic. Its potential impact on the Chinese economy, the second largest in the world, and therefore global, is impossible to calculate yet. And although the panic does not spread at the moment, uncertainty plans over the markets.
Thus, today the preoccupation with the bad business perspectives prevails unlike yesterday Monday, when the investors celebrated with purchases in the bags the last measures of the central bank of China to mitigate the negative effects of the coronavirus in the economy.
The stock market in Japan has chained seven days down to the pessimism in the technology sector, weighed down today by Apple's worst forecasts. Also, Wall Street, which quotes again on Tuesday after the 'rest' for President's Day, anticipates moderate sales.
The potential appeal resists
Meanwhile, European equities recede and move away from their significant resistance. The selective reference, the EuroStoxx 50, drops to 3,830 points. It can aspire to a potential in the short term of 10%, but for this it must firmly surpass its “key resistance zone”, according to Joan Cabrero, Ecotrader Strategy Director.
This expert explains that the level to beat is in the 3,836-3,855 integers, zone that the index of the Old Continent presses for days but that has not finished attacking. Today, despite the falls, it does not distance itself much from it.
In addition, the technical analyst believes that these sales are “a simple break in promotions.” And they will not stop being it while the EuroStoxx 50 does not close a session below the 3,775 units, for which it would have to suffer cuts of more than 1.5% from its current levels.
At the edge of 10,000
For its part, the Ibex 35 moves on Tuesday to the edge of 10,000 points, a psychological level on which it closed yesterday, something that it had not achieved since May 2018.
The main selective Spanish stock market records more measured sales than other neighboring places. I was benefited by another Mediterranean parquet, that of Milan, whose Ftse Mib index registers moderate purchases thanks to the strong momentum of the bank: UBI soars 25% after Intesa Sanpaolo (+ 2.5%) has launched a public tender offer (OPA)
The news encouraged the medium-sized banks of the Ibex 35 in the early hours, although most of the entities have subsequently turned down. Only Sabadell endures at the top of the table with rises higher than 3%.
And it is that the European sector is also being harmed by the bad results of the largest entity in Europe, the British HSBC. The firm has announced that its profit was reduced by 53% last year. In addition, his business is very exposed to Asia, so he has anticipated a marked impact of the coronavirus.
HSBC shares in the Hong Kong stock exchange (already closed) have fallen 2.78%, its worst session in the Hang Seng since February 2016. Now leading the sales in the Ftse 100 by leaving more than 6%, his worst day in the London parquet since August 2015. Samsung also falls strongly (-4%) in the British market to be 'infected' by its competitor Apple.
Back to the Spanish parquet, the two large banks, Santander and BBVA, fall by about 1%. Another 'heavyweight' such as the Repsol oil company is left 2% between yesterday and today; on Friday he announced a provision of 837 million euros.
Telefónica acts as a counterweight by registering increases of 1.5% in its shares. The 'teleco' has approved its first dividend in Brazil, its second market, explains Sergio Ávila of IG Spain. On Thursday, it will publish its 2019 results.
Iberdrola, other blue chip, falls moderately despite the record profits of its Brazilian subsidiary.
ACS suffers before your accounts
Acciona accompanies Sabadell and Telefónica in the largest purchases: it increases almost 2% before a positive report by Citi analysts.
Grifols rises slightly. The Catalan company has announced that it will open a plasma network and several factories in Saudi Arabia. Mapfre is trading down: the insurer has bought part of the Dominican Ars Palic.
Instead, Enagás It is left about 1% after making its 2019 accounts known. Your profit is below market forecasts. In addition, investors may be taking profits after the increase of more than 40% that the gas company has experienced since its 2019 lows, as Renta 4 analyst Ángel Pérez points out.
Worst stop looks ACS, which goes back 3% in the parquet and leads the sales. The construction company will publish its annual balance after the market closes.
ArcelorMittal, whose business is very exposed to China, together with Acerinox and Meliá are also one of today's most bearish companies.
However, according to Joan Cabrero, the Ibex 35 can aspire in the short term to its “objectives” and “resistance” in the 10,300-10,400 points. “The long-term uptrend will remain intact as long as a possible cut does not deepen below 8,275 points“, says the expert of Ecotrader.
In the French bag, Alstom It collapses 5% after confirming yesterday afternoon that it will buy the Canadian railroad business Bombardier for 5.900 million euros.
Bonds reduce interest
As investors decrease their demand for equities today, they opt for the sovereign debt market. Thus, the ten-year German bond (bund) lowers its profitability to -0.41%.
The Spanish down to 0.27%, so the risk premium Spain, which measures the differential with German debt, remains stable below 70 basis points. The Treasury today auctioned letters with which it has raised 1,268 million euros with lower interest. It has also been known that public debt ended 2019 at 95.5% of gross domestic product (GDP). This on the same day that the Government has approved the 'Tobin rate'.
Also, the euro falls slightly again in its crossing with the dollar. Has touched a minimum intraday at 1.0814 'green notes' and moves in prices April 2017 minimums.
The currency has deepened the declines after the publication of the ZEW indices. These reflect the sharp decline this month of the confidence of German institutional investors in the economy of the country and the Eurozone.
It should be remembered that the economy of Germany, the biggest power of the Eurozone, did not grow in the last quarter of 2019 and that the country's central bank (Bundesbank) does not believe that there are “signs of a fundamental change” in the first three months of this year.
Oil falls hard
Finally, it is worth highlighting the impact, one more day, of the fear of the coronavirus in the oil market. Their prices fall more than 2% in the session. The Brent, of reference in Europe, lowers its price to 56 dollars a barrel. So far this year, it loses almost 15% (2019 ended at $ 66 a barrel).
In a market comment, the Unigestion manager stresses that “global oil demand has fallen 5% in the last 30 days, from 20 to 18 million barrels per day.” “The situation is serious,” said these experts.
Investors are waiting to know if Russia will finally yield and support Saudi Arabia so that the Organization of Petroleum Exporting Countries (OPEC) will expand production cuts, with the aim of balancing them with the lowest demand. Until now, the positions of Moscow and Riyadh have been distanced.
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