Central Banks vaccinate the market and Ibex 35 rises 1.35%



The global exchanges extend the rebound generated in yesterday’s session

The global exchanges extend the rebound generated in the session yesterday, the Dow Jones starred in its greatest rise in points in its history, to recover part of the ground lost in recent days. The Ibex35, which in yesterday’s session approached 8500 points, takes the opportunity to bounce more than 3% from the aforementioned levels. The market began discounting yesterday’s performance of an aligned performance by the Central Banks in order to mitigate the possible effects of the coronavirus in economic terms. Early in the session, the Central Bank of Australia lowered interest rates by 0.25% to 0.50%, which is its historical low. After the American opening we met the reduction by the Fed of 50 basis points to leave it on the fork between 1% and 1.25%. The Federal Reserve mitigates the fire of volatility by lowering off its marked calendar. This anomaly has not occurred since 2009 in the midst of the subprime crisis.

Within the Ibex35 we highlight the increases in IAG. The airline, after yielding more than 30%, bounces on the day above 8%. The punishment may be excessive but, at least for now, no major corrections can be ruled out at a value that is highly exposed to a possible closure of air traffic caused by the health alert. Another positive catalyst for the rebound of the Ibex35 was the banking sector. Although the rate reduction negatively affects their outlook, the EU’s ruling on IRPHs gives them some oxygen in the short term.

Looking forward to the next few days we hope that the effect of the Central Banks will be diluted. We will not bet on the continuity of the increases in the short term while the coronavirus’s shadow, and its impact on the listed business, remains on the horizon. Therefore, we understand as a more sensible scenario to stay in liquidity or, if financial knowledge permits, to activate possible partial or total coverage of our equity portfolios.

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