Investors digest the new negotiations with Russia and the start of interest rate hikes in the US with progress
The Spanish Stock Exchange digests the decision of the US Federal Reserve (Fed) to tighten its monetary policy, with increases of 0.3% for the Ibex-35 above 8,400 points thanks to the upward pull of tourism and banking securities such as IAG, Meliá, Bankinter and Sabadell, which advance more than 1%.
Inditex is another of the great protagonists at the top of the table after yesterday's presentation of its annual results. Analysts adjust their numbers with downward recommendations on the textile giant's target price. JP Morgan cuts to 31 euros per share, while HSBC or Barclays leave it at 27 euros. Despite the reduction, these prices are well above the company's current price, which is around 21.7 euros per share.
In the lower part of the table, the energy companies stand out, after learning that Competition has begun the analysis of hundreds of supply contracts to see if these companies have adjusted or not to the cut that the Government approved last year. In other words, the so-called profits fallen from the sky are being analyzed and investors are fleeing from this regulatory risk.
Jerome Powell's message
Regarding the Fed, the body led by Jerome Powell made it clear yesterday that its mandate is inflation and that neither the war in Ukraine nor the rest of the macroeconomic uncertainties will prevent everything possible from being done to stop the recent rise in prices.
Specifically, yesterday the Fed inaugurated a new era of interest rate hikes, with an increase of 0.25 basis points, leaving the reference rate in the range of 0.25% to 0.50%, which means its first move in this regard since 2018.
“We understand that, on the whole, the US central bank was more aggressive than expected when it comes to the process of withdrawing stimuli. Thus, the FOMC now expects to raise its official rates six more times in 2022 and another three more in 2023, which would place it at the end of the process at approximately 2.4%”, indicate experts from Link Securities.
Today it will be the turn of the Bank of England, the first of the big monetary organizations that started the upward cycle of rates. And it is expected to approve the third consecutive rise in the official price of money.
Against this background, investors are closely following the evolution of the negotiations between Russia and Ukraine. But analysts are wary of the final outcome of these talks for the markets, warning that while a peace deal will be welcomed by investors, they will have to immediately assume that the geopolitical scenario will not be the same for a long time.
"This will force investors to rethink their investment strategies, which at the moment are highly conditioned by the absolute lack of visibility, which is causing strong sectoral rotations from one day to the next and even during the same session," they indicate. .
In other words, volatility is guaranteed for the coming weeks. Also in the raw materials market, where the price of oil is trading on the rise again. After cutting below 100 dollars yesterday, the Brent-type barrel is close to 102 dollars again, while the American West Texas is close to 98 dollars.