After a few sessions of new highs and optimism we have seen how caution has taken over financial markets
After a few sessions of new highs and optimism we have seen how caution has taken over financial markets. Last morning, China published a new count of coronavirus infections. Deaths have shot up to 242 in a single day and affected cases have gone from 2,015 records to 15,000. Asian equities have suffered a strong correction that has been transferred to different international markets.
The rebound in coronavirus cases may have a negative macro impact. Citi has lowered the forecast of Chinese growth to 5.3%, started 2020 with an expectation of 5.8%. In reference to macroeconomic data, today we have known, by the European Commission, the growth of the economy for both 2020 and 2021, up to 1.6% and 1.5%, so an improvement in private consumption is expected And the investment. While HSBC estimates a two-tenth cut in world GDP, from 2.5% to 2.3%. These data have not been sufficient to boost the session, mainly marked by a mixed sign.
Looking ahead to the Spanish stock market, investors have activated sales by slowing the bullish streak. While the market looked at 10,000 points, the truth is that Asian uncertainty cuts the selective Spanish to lower levels.
The values most affected by the virus again suffer cuts. The titles most linked to tourism such as IAG and Amadeus have suffered on the floor during today’s session. Companies linked to the economic cycle have also been negatively affected, ArcelorMittal, Acerinox, Cie Automotive lose the increases experienced. Volatility continues to take over the banking sector. The interest on the downside makes the increases dry, while in yesterday’s session they were the main catalyst for the increases.
The main beneficiaries of debt interest cuts are values within the electricity sector. We highlight Iberdrola and Endesa with bullish potential for the next sessions.
Coronavirus also has its effect on oil. The one known as “black gold”, waiting for developments in the cuts by OPEC, undergoes sharp cuts where a decrease in world demand for crude oil is expected during the first quarter.
In the fixed income market, the Spanish ten-year bond clears yesterday’s session rises below the 0.30% level, while the risk premium remains anchored at the level of 70 basis points.