TRUMPDOWN- Ibex 35: Week of Declines after Trump's VictoryThe Ibex 35 faces a week of losses, registering an accumulated fall of 2.2%, influenced by the reelection of Donald Trump in the U.S. The prospect of new tariffs and restrictive trade policies have generated concern, especially for Spanish companies with international operations. At mid-session, the Spanish index fell 0.28% to 11,537.60 points, and then recovered to 11,586.80 points during the midday break.
Among the most affected stocks of the day were ArcelorMittal and BBVA, with declines of 2.72% and 2.59%, respectively. BBVA, in particular, faces uncertainty about how Trump's policies could influence its business in Mexico. In contrast, IAG and Grifols stand out positively, with increases of 5.82% and 5.77%, thanks to solid recent business results.
International Trends: Contrasts between Europe and the United States
The European context reflects investor caution, with declines in the region's main stock indexes. The German DAX and the EURO STOXX 50 are down 1.07%, while the French CAC 40 is down 1.01%. In contrast, the US indices, boosted by Trump's victory, show an opposite trend, reaching new highs on the S&P 500 and the Dow Jones. This optimism on Wall Street has been helped by the Federal Reserve's recent decision to cut interest rates by 25 basis points, in line with market expectations. At the end of the morning session, all indices are negative except the IBEX and the Portuguese PSI, a clear link between politics and indices.
Commodities and Currencies: Moderate Declines in Oil and Gold, with Euro Declining
The commodities market has a weak tone. Brent oil has fallen by 1.47% and gold has lost 0.56% to 2,690 dollars per ounce. In the currency market, the euro is down 0.22% against the dollar, trading at 1.0782 units. Bitcoin, on the other hand, has registered an increase of 1.71%, reaching 76,312 dollars.
This scenario shows a market divided between caution in Europe and optimism on Wall Street, where investors remain attentive to changes in U.S. trade policy and its impact on an uncertain economic environment.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
SP35 trade ideas
Upward momentumThe index will test previous established higher highs due to finding support on an essential barrier at 11,400. As long as price action fails to go this barrier, bullish moves will be favourable until reversal.
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Ibex 35: A Sectoral OverviewThe Ibex 35 has performed remarkably well in recent sessions, reaching an intraday high of 12,000 points, thanks to the solid performance of several market sectors.
Telecommunications
The telecommunications sector has been the main driver of the index, led by Telefónica. The company experienced a strong boost following a favorable European court decision regarding its German subsidiary, E. Plus. This endorsement helped Telefónica to lead the market and thus lift the index above 12,000 points.
Construction and Infrastructure
The construction and infrastructure sector also played an important role, with ACS standing out in the index. Its positive performance helped to keep the Ibex 35 at high levels, consolidating its position above 11,900 points.
Energy
In the energy sector, Iberdrola reached a significant milestone of over 14 euros per share, consolidating its capitalization at close to 90 billion euros. This success not only reflects the strength of the company, but also the confidence in the energy sector within the index.
Retail
Inditex, the retail giant, has shown solid resistance by adding 0.81% to its value, which also contributes to the overall thrust of the Ibex 35. Inditex's stability and growth are crucial to maintain confidence in the sector.
Banking
On the other hand, the banking sector faced difficulties. Bankinter and BBVA led the falls, with declines of 1.65%. The pressure on banks has become evident, limiting the growth of the index on a day when optimism predominated in other sectors.
Conclusions
As the Ibex 35 seeks to break above 12,000 points for good, the combination of strengths in sectors such as telecommunications, construction, energy and retail contrasts with the difficulties in banking. The market's attention will be focused on how these sectors continue to evolve in a changing economic context.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
The Ibex 35 takes a pause within an upward trendThe IBEX 35 remains flat, with mixed performance among the selective stocks. The most bearish companies are those negatively affected by interest rate cuts, such as banks, while construction, real estate, and utilities, which benefit from lower rates, rose today after:
Several ECB members advocate for another interest rate cut next week after having reduced them twice this year, and financial markets almost certainly expect a cut to the deposit rate to 3.5% on October 17.
The French central bank chief, François Villeroy: the cut is likely, and it will not be the last one, depending on how inflation evolves.
Economic weakness: The economy has been stagnating, the labor market is weakening, wage growth is slowing down, and inflation has fallen faster than the ECB had predicted.
Market expectations: Investors expect the ECB’s deposit rate to fall to 3% by the end of 2023 and to 2% by the end of 2025, which is considered the neutral rate, a level that neither stimulates nor slows economic growth.
Additionally, investors remain cautious due to global uncertainty and decisions from the Fed.
Investors are waiting for the minutes from the Federal Reserve (Fed) meeting to get hints about interest rate easing in the U.S. The market estimates a 98% probability of a 25 basis point cut at the next meeting.
U.S. inflation data (Thursday) and the producer price index (Friday) will be crucial.
Uncertainty in the U.S.: Recent employment data and wage inflation have raised doubts about Federal Reserve rate cuts, strengthening the dollar and increasing bond yields.
China and the Middle East: Market correction in China and geopolitical tensions in the Middle East are affecting oil price stability and adding more pressure to international markets.
However, the IBEX 35 has an upward target activated by breaking out of a lateral range up to 12,413 points, a scenario which, in my opinion, is the most likely to materialize in the medium term.
Sergio Ávila
Analista senior de IG
IBEX 35 Triples its annual average and Performance Analysis
Cumulative performance in 2024: The Ibex 35 has maintained a remarkable performance in 2024, with a cumulative rise of 18.5% in the first nine months of the year, outperforming its historical annual average of 6.6%. This performance has consolidated the Spanish index as the strongest in Europe in this period, with a quarterly rise of 9.4%, outperforming its European peers such as the EuroStoxx 50, which posted a rise of 3.5%. Compared to the S&P500, its historical annual average is 9.5%, the DAX 10.3% and NASDAQ 18.1% (the most bullish).
Positive start to October: The start of October has been equally positive, with the index reaching new annual highs after a solid September, in which it rose 4.4%, taking the Ibex to 11,950 points, a level not seen since 2010.
General context and drivers: Although September is usually a month of market correction, this year has been an exception, as the easing of monetary policy has benefited equities, especially in more indebted sectors. This has facilitated a year-to-date rise of 16.8%.
Bullish Companies:
• IAG: IAG was the most bullish company in the quarter, up 33%.
• Financial sector: It has been key to the performance of the Ibex, with Banco Sabadell (+66% in the year) and Caixabank (+42%) standing out. Both continue to show growth opportunities due to their solid earnings and the expectation of higher credit volume and mergers that would offset the reduction in interest margins.
• Grifols: Although down 34.5% for the year, it has rebounded 59% from the March lows. A target price of 17.27 euros per share is projected, giving it a strong upside potential of 70%.
• Fluidra: followed IAG and Grifols as the third with a 21% rebound in September.
• Colonial: rose 12% in September.
• ArcelorMittal and Acerinox: Despite their falls so far this year, both have projected medium-term growth of 52% and 40%, respectively. September's rises were 11%.
• Energy and technology sectors: These are singled out by analysts as areas with potential, benefiting from the moderation in interest rates and macroeconomic momentum.
Bearish companies:
• Telefónica: Despite accumulating growth of 24.5% in 2024, its value is expected to decline by 5.7%, reflecting limited near-term growth potential.
• Inditex: The company has reached all-time highs after solid quarterly results, closing the month up 9%, but its further upside potential appears to be limited.
• Puig: fell 18.7% in September and accumulates a year-to-date loss of 21%.
Ion Jauregui –ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
The Ibex 35: an attractive index full of opportunities in 2024Throughout 2024, the Ibex 35 has surprised investors with a 17% rally since the start of the year, consolidating its position as one of the best performing indices in Europe. This has been driven by key sectors such as banking, telecommunications, tourism and renewable energies. Despite this strong advance, the Spanish stock index is not considered expensive, offering an attractive opportunity for investors seeking long-term value.
An attractive price to book value
The Ibex 35 currently trades at a price-to-book ratio of 1.5x by 2025, making it one of the most attractive indices compared to its track record over the past decade. This discount has been made possible by the solid performance of the companies comprising the index, which have been able to take advantage of a favorable macroeconomic environment and persistently high interest rates in Europe.
Among the stocks that stand out for their discount to book value are Cellnex, Solaria and Rovi. Cellnex (Ticker AT: CLNX.ES), a leader in telecommunications infrastructure, trades at 1.8 times book value, well below its average of 11 times. This discount is in response to interest rate hikes and the company's deleveraging, which could lead to an increase in shareholder remuneration in the coming months. Solaria (Ticker AT: SLR.ES), one of the leaders in solar energy, trades at 2.5x versus a historical average of 9.7x, penalized by the fall in energy prices and delays in key projects. For its part, the pharmaceutical company Rovi (TICKER AT: ROVI.ES) offers a discount of more than 50% compared to its historical book value, making it one of the most attractive options for 2025.
Spanish banking leadership
Banking has been one of the big drivers of the Ibex 35 this year, boosted by the prolongation of a high interest rate environment. BBVA (TICKER AT: BBVA.ES)and Santander (SAN.ES), two of the index's leading banks, have seen their profit margins expand, and everything points to them remaining key players in the index's performance in the coming quarters.
In addition, other major Spanish companies such as Inditex (Ticker AT: ITX.ES), Telefónica and IAG have also played a relevant role in the Ibex leadership, benefiting from the recovery of tourism and post-COVID consumption, as well as organic growth and international expansions.
Outlook for the Ibex and the Spanish stock market
Despite the accumulated gains, the Spanish stock market continues to offer value. In addition to its discount to book value, macroeconomic expectations, especially in Europe, where possible interest rate cuts are expected, may continue to favor key sectors such as banking, infrastructure and renewable energies. These positive signals offer investors the opportunity to continue to participate in a market that has demonstrated strength and growth.
With a strong base in strategic sectors and the support of monetary policies that could become more accommodative in the coming months, the Ibex 35 continues to show great potential for appreciation in the medium and long term. Investors betting on this index will not only find companies with solid fundamentals, but also attractive dividends that complete the positive outlook for the Spanish stock market.
Ion Jauregui - Analyst ActivTrades
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Fed Cuts: New Boost for the Ibex 35?The recent 50 basis point reduction by the Federal Reserve (Fed) has had a significant impact on global financial markets, including the Ibex 35. This cut, which comes on top of 18 similar occasions since the turn of the century, seeks to stimulate the economy in times of economic uncertainty. For the Ibex 35, the Fed's move has generated positive momentum.
The Spanish index has shown strength, and this effect is expected to spread to other indices such as the Ibex Medium and Small Caps, bringing them closer to their annual highs. The Ibex Small Caps, in particular, is close to reaching a crucial upward trend line, which could trigger a significant rally in Spanish equities.
The Fed's monetary policy, by cutting interest rates, not only affects the US dollar, but also has a knock-on effect on international stock markets. In Europe, the EuroStoxx 50 is approaching key resistance, while in the US, indices such as the S&P 500 and the Dow Jones could surpass their annual highs, driven by the same monetary policy that favors stock markets.
Currently, the IBEX35, is currently at highs again at 11,881.43 points with a strong trading zone between 11,195.46 points and 10,931.36 points respectively, and initial support at 10,491.19 points. The next support rests at the upper zone of the indicated trading range at 11,195.46 points. The RSI shows an overbought level of 77.16%, evidencing the positive impact of the Fed's decisions on the Spanish spread. The upcoming Spanish bond auctions and Schnabel's speech will be crucial to determine the future direction. If the trend continues, we could see an upward extension, although Fibonacci projections suggest that the index may not exceed 11,906 points (161.80% of the original momentum).
In summary, the Fed's rate cut is positively influencing the Ibex 35, providing a favorable context for the Spanish index, along with other European and US indices, to approach its highs and experience a potential rally.
Ion Jauregui - Analyst ActivTrades
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
IBEX35/EUROSTOXX50: Preparing for Imminent VolatilityEuropean stock markets, boosted by the ECB's recent meeting, have managed to ward off the fears that plagued markets in early September. Although the recent rebound has helped the indices to stay away from the August lows, it is not yet a definitive recovery. The declines at the beginning of the month have proved too deep to be considered a simple consolidation, suggesting that additional bouts of volatility may be ahead before a sustainable upswing. In this context, remaining calm, reducing exposure to the stock market if it is high, and being prepared for future buying opportunities is advisable.
On Friday, Spanish stock markets closed higher, with the IBEX 35 gaining 1.23%, reaching a new five-year high. The financial services, construction and technology sectors drove the rally. Inmobiliaria Colonial SA led the gains, while Bankinter and Redeia Corporación SA were among the losers.
It is crucial to maintain liquidity to take advantage of possible pullbacks, which will allow acquiring assets with a better risk-return ratio. Key supports to monitor include the 4,730 points of the EuroStoxx 50 and the 11,138 points of the IBEX 35. Looking at the IBEX 35 chart, there is solid support around 11,100 points. After overcoming double resistance last week, there is a possibility that the index will advance to new highs driven by volatility. The current RSI stands at 64.67%, suggesting that this upward momentum could continue, as long as previous fears do not affect its trajectory.
It is relevant to mention the EuroStoxx 50, as both indices have shown a high correlation recently. However, in the last week, their movements have been different, probably due to the practically null weighting of the EuroStoxx 50 in relation to companies in the Spanish index. The EuroStoxx 50 is moving in a sideways range near the strong trading zone of 4,843 points. With an RSI of 64.26%, this index could correct towards the lower indicated zone of 4,730 points.
Ion Jauregui – ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
IBEX 35 Index Overview | Chart & Forecast SummaryKey Indicators on Trade Set Up in General
1. Push Set Up
2. Range Set up
3. Break & Retest Set Up
Active Sessions on Relevant Range & Elemented Probabilities;
* Asian(Ranging) - London(Upwards) - NYC(Downwards)
* Weekend Crypto Session
Trend |Time Frame Conductive | Daily Time Frame
- General Trend
- Measurement on Session
- Signpost
* Support & Resistance
* Trade Area | Focus & Motion Ahead
# Position & Risk Reward | 15 Minutes Time Frame
- Measurement on Session
* Retracement | 0.5 & 0.618
* Extension | 0.88 & 1
Conclusion | Trade Plan Execution & Risk Management on Demand;
Overall Consensus | Buy
IBEX Elliott Wave Cycle from Early this Month is Mature and May Short Term Elliott Wave in NASDAQ:IBEX suggests decline to 10307.61 ended wave ((4)). The Index has turned higher in wave ((5)) but it still needs to break above wave ((3)) peak at 11469 to rule out a double correction. Internal subdivision of wave ((5)) is unfolding as a 5 waves impulse Elliott Wave structure. Up from wave ((4)), wave ((i)) ended at 10488.6 and wave ((ii)) pullback ended at 10308.9. Index then rallied higher in wave ((iii)) towards 10632 and wave ((iv)) dips ended at 10445.7. Final leg wave ((v)) ended at 10687.7 which completed wave 1 in higher degree. Pullback in wave 2 ended at 10572.20.
Index has resumed higher in wave 3. Up from wave 2, wave ((i)) ended at 10714.4 and pullback in wave ((ii)) ended at 10611.4. Wave ((iii)) higher ended at 11151.2 and pullback in wave ((iv)) ended at 11056.5. Final wave ((v)) ended at 11207.5 which completed wave 3. Index then pullback in wave 4 which ended at 11156.3. Expect the Index to extend higher a few more highs before ending wave 5 and it should then complete wave (1) in higher degree. Afterwards, it should pullback in wave (2) to correct cycle from 8.5.2024 low in larger degree 3, 7, 11 swing before it resumes higher. Near term, as far as pivot at 10307.6 low stays intact, expect dips to find buyers in 3, 7, 11 swing for more upside.
IBEX35 the most bullish index in Europe 2024
The Madrid Stock Exchange has recently stood out as the most bullish in Europe in 2024, with the IBEX 35 up 11.5% so far this year. This growth has been driven by expectations of global interest rate cuts and optimism around corporate earnings, especially in the United States. Shares of Spanish companies such as Iberdrola and Inditex have reached record highs, with Inditex becoming the first Spanish company to surpass €150 billion in market capitalization.
Nvidia has also been a focus of attention, as the market expects the technology company to report its best quarterly results ever, highlighting its central role in the rise of artificial intelligence. This optimism has driven global indices such as the MSCI World and the MSCI All Country World Index (ACWI) to record highs.
Despite this positive environment, analysts maintain a cautious approach due to economic uncertainty in Europe and geopolitical volatility, warning that while rate cuts can boost markets, they can also generate volatility. Currently the index is looking for the highs again, after exiting the trading channel near the checkpoint around 11,072 points. RSI currently shows an oversold level of 65.36% so it is very likely that it will not be able to pierce the current high in the short term.
Ion Jauregui - Activtrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Ibex35: Will it maintain its momentum after Jackson Hole?The Ibex 35 has started the week strongly, rising 0.7% and reaching 11,150 points, consolidating its position as the most bullish index in Europe in 2024 with a year-to-date increase of 10.45%. Surpassing 11,000 points reinforces the bullish trend of the Spanish market, and today it has broken 11,150 points. The RSI is oversold at 63.15%, and the checkpoint (POC) has remained near 11,100 points. However, the focus is on Fed Chairman Jerome Powell's speech in Jackson Hole, which could influence financial markets, especially monetary policies and debt developments. This speech will be key in determining whether the Ibex 35 maintains its momentum or experiences a correction, with the possibility of the index piercing the sideways range at 11,195 points at the close.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
IBEX 35 loosing momentumLoosing bullish momentum, RSI crossing its 9 week MA to the downside, overlapping waves and on the upper side of the Bollinger and YTD AVWAP bands.
If 10800 level is lost, we could see a very bearish development (lower highs and lows, downside momentum accelerating, middle term trend lines being traspásese, etc.) with a PT around the 9800/9600 area
Spanish stock market looks ready for a sell-offThe Spanish Stock Market Index is facing significant pressure as Euro area inflation rose higher than expected. July's inflation figures showed a 2.6% annual increase, slightly above the previous month's 2.5%, matching May 2024's level. Despite the rise in inflation, the unemployment rate has only marginally increased from 6.4% to 6.5%, still holding multi-year lows not seen since at least 1995, when records began. This indicates that the labour market remains strong and could fuel inflation down the road.
Yesterday the IBEX 35 saw a sharp drop of approximately 1.75%, reflecting investor concerns. Additionally, the Spanish market is dealing with its own domestic issues. Today, the situation has become particularly interesting as the price appears to have triggered a large triangle pattern that has been forming over the last 93 days. We are now close to breaking below a critical support level at the July 9th low of 10,867. A break below this level would likely confirm the activation of the bearish pattern, with the trend expected to remain negative as long as the price stays below 10,952. This current market situation is of significant importance and should be closely monitored.
The triangle pattern suggests potential targets of 10,700, followed by 10,600, ultimately reaching the pattern target 10,533. While the price is unlikely to drop to the lowest target, the current setup allows for a favourable risk-to-reward ratio.
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Ibex 35: Potential of 15% in a Volatile MarketAmid global volatility, the consensus of market analysts show confidence in the Ibex 35, with only 8% of recommendations to sell, the lowest figure in two decades. Despite recent corrections, more than 58% of recommendations suggest buying, and the index has upside potential of 15%, according to Bloomberg and FactSet. The Ibex 35 reached 11,476 points in June this year, accumulating a rise of 11%, making it the second most bullish index in Europe, behind the Italian Ftse Mib. Although political uncertainties and the disappointing results of the major technology companies have affected global markets, these declines are seen as buying opportunities.
Among the best recommendations in the index are Sacyr, Logista, Puig, IAG and Acerinox. Sacyr leads with a dividend yield of 4.4% and a 2.4% increase in half-year net profit. Logista, at all-time highs, has a dividend yield of 7.6% and a record ebitda of 485 million euros is expected in 2024. Puig, a recent addition to the Ibex 35, has an upside of close to 20%.
Despite the current political situation in Spain and the high level of unemployment, Ibex 35 could reach between 11,875 and 12,000 points as long as it maintains the most consistent support in the area of 9,800 points and the supports above 10,000 points are not broken.
If we look at the chart, the current trading zone is located between 11,195.46 and 10,931.36. We have to see if the support at 10,825.94 points can hold and allow the Spanish differential to push upwards. On the other hand, the RSI is currently at 49.92% with no strong trading volume since the end of June where the strength in the market was reduced. On the other hand, the Check Point (POC) is located at 10,100 points, so it is quite easy that if the volatility of sellers increases, the market will pull back strongly.
Ion Jauregui - Analyst Activtrades
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
IBEX35 sails bearishThe Iberian spread closed yesterday down -1.30% marking the milestone of 1 month in decline. The best performing company was Repsol (BME:REP) which climbed +1.65% ending at 15.13 at the close. Merlin Properties SA (BME:MRL) closed up +0.48% at 10.50 and Sacyr (BME:SCYR) was up $0.42 at 3.34. The worst performers were Enagas (BME:ENAG) with -9.29% closing at 12.79, Acciona (BME:ANA) -6.55% at 105.60, ACS Actividades de Construcción y Servicios (BME:ACS) with -4.19% closing at 38.44. In short, the falling stocks outperformed the rising ones on the Madrid Stock Exchange.
Today, tourism data is published, which is expected to be positive for Spain in the summer season with 12% compared to the previous 8.3%, and industrial production data in several euro zone countries, including Spain, which is expected to be slightly worse. For the euro zone as a whole, things are not looking very different.
Focusing the eye on the chart, IBEX35 has formed an area of strong resistance at 11,384.44 points and the area of 11,159.06 is the second area of strong resistance, a possible Shoulder - Head - Shoulder figure has been generated, and seeing the monthly trend and economic data, it would not be unusual to see that the index seeks again this second area of resistance and plummets towards the lows of 10,837.43 points. On the other hand the shape of the bell is not overly clear given that it has a triple formation with the most traded price at the checkpoint at 11,326 points. And its second control price zones are located at the current price. The RSI is overbought at 60% so it would not be unusual to see a correction. In principle, it seems that the trading area for this summer can be framed between the first strong resistance and the area of lows.
Focusing the eye on the chart, IBEX35 has formed an area of strong resistance at 11,384.44 points and the area of 11,159.06 is the second area of strong resistance, a possible Shoulder - Head - Shoulder figure has been generated, and seeing the monthly trend and economic data, it would not be unusual to see that the index seeks again this second area of resistance and plummets towards the lows of 10,837.43 points. On the other hand the shape of the bell is not overly clear given that it has a triple formation with the most traded price at the checkpoint at 11,326 points. And its second control price zones are located at the current price. The RSI is overbought at 60% so it would not be unusual to see a correction. In principle, it seems that the trading area for this summer can be framed between the first strong resistance and the area of lows.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
IBEX35 still not reflecting "The Great BabyBoomer Retirement"Today in Spain a scandal has been revealed about how to pay 60% more pensioners with the same number of employed people. The baby-boom generation is starting to retire, and it is expected that by 2050 there will be 6 million more pensioners and the same number of workers. There are currently 21 million employed (taxpayers) and more than 9 million pensioners. The government has already exhausted the pension fund and has been using credits to cover the deficit of 50 billion euros per year. According to the European Commission's Ageing Report 2024, this problem is expected to worsen, not only in Spain, but also in countries such as Lithuania, Slovenia and Portugal, due to high replacement rates and low birth rates.
The governor of the Bank of Spain, Pablo Hernández de Cos, warned that burdening the working population with more taxes will break the pact between generations. The baby boomers will retire over the next 17 years, and there will not be enough employees to sustain the system. In addition, the Toledo Pact and updating pensions with the CPI will further increase costs. Spain has depended on immigration for demographic growth given that the birth rate has been negative for some time due to the difficulty of access to housing and stable jobs, but the majority of immigrants are of low productivity and qualifications well below the national average, which does not solve the problem but increases public spending not only in retaining massive irregular immigration coming mostly from sub-Saharan Africa but in the unconscious form of access to subsidies that this and previous governments have granted to them. This is not a panacea but an added part of the problem, since it adds fuel to a fire that only increases public spending, as it is a type of migration without sense or control.
Back to the markets, European stocks start their week this June 24, St. John's Day, flat after receiving the results report of mining stocks with contained gains during the French elections. The government has asked BBVA for a takeover bid option that does not imply the full integration of Sabadell but rather seeks synergies and can maintain the Ticker in the IBEX35 market. For long term investors, this could be considered a good moment to enter the Spanish market at this time given that the financial sector has always weighed heavily on the index and with the arrival of the rate cuts this moment could be interesting for stocks with predictable returns (Bond Proxies), given that the IBEX 35 has a few, which can make it the most attractive index in Europe in terms of valuation and potential. With a rising US market that omits the word "recession" a sharp correction could be on the table.
In relation to Europe the election issue has cleared an X and now possibly other doubts about investing in the European market will be raised. There have been times when the markets have risen as a whole and this is one of them, but the handicap of Spain at this time is that the Spanish stock market has not only not improved but has worsened and the fact is that investors as a whole have lost interest in the Spanish stock market, each time less volume is noted and it is a stock market where it is perceived that it is developing downwards.
• Energy: Iberdrola is similar to Inditex in the utilities sector due to its geographic diversification and installed capacity, although Endesa could follow it in terms of share price. This year has been unfavorable for energy companies due to the slight fall in electricity prices and interest rates that did not fall as much as expected.
• Renewables: Solaria and Acciona have been very affected by short traders, resulting in very low prices. Red Eléctrica is an interesting option compared to Enagás, which has higher risk. Redeia offers a better dividend yield and is more stable, with a key role in electricity distribution for 2026-2030, which makes it attractive.
• Infrastructure: Sacyr shows great long-term hidden value, while Ferrovial has a more balanced valuation.
• Textile: Inditex is a benchmark in the sector, contributing 30% of the Ibex35's earnings. It is superior to H&M and Shein because of its unique business model, both in physical and online presence.
• Telecommunications: Telefónica faces challenges in a mature sector, with limited growth in Latin America due to competition and its high debt, and a high dividend.
• Petrochemicals: Repsol has made good moves in production and renewables, with a high dividend yield. However, oil companies are very sensitive to macroeconomic and political situations.
• Real estate: Merlin manages two socimis, Criteria and Colonial, the latter being highly discounted in price. Criteria is popular with investors.
• Logistics: Logista has a solid financial position and a low-risk business with an attractive dividend. It is important that its largest investor, Brand Imperial, maintains its positions.
• Tourism: AENA is a solid option, while IAG, Meliá and Amadeus are very cheap companies. Meliá could exit the Ibex, although this will not affect its intrinsic value.
• Extremely overvalued: Fluidra and Laboratorios Rovi
• IBEX Medium and Small Caps: Catalana Occidente, Ebro Foods, Neinor Home and Ence are interesting companies.
Looking at the index chart it appears to be moving in the area between the 10,825.94 point low and the 11,476.05 point high. The movement since the elections has begun to correct upwards and it is possible that this summer it will remain in the direction of the control point zone (POC) 11,331.53 points. Seeing such a corrected European market and with such a Spanish spread weighted in highly healthy companies it will not be unusual to see this high point breached. The RSI signal was given on the 21st and at the moment the RSI is at 54.44% with the appearance of wanting to evolve upwards. We will see if these processes develop again to overcome the stage of maximums.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Spain's Political Shift: Rising Investment RisksRecent political developments in Spain, particularly Deputy Prime Minister Yolanda Diaz's controversial pro-Palestine remarks, have strained diplomatic relations with Israel and drawn international criticism. This escalating tension raises concerns for investors in the Spanish market.
Potential for Instability: Heightened geopolitical tensions and the possibility of increased antisemitism could lead to social and political instability in Spain. This, in turn, could deter foreign investment and damage the country's international standing.
Security Risks: The recognition of Palestine amidst ongoing Middle Eastern conflicts elevates the risk of terrorist activity within Spain, further eroding investor confidence.
Market Disadvantage: Unlike the US, Spain lacks a significant presence of major technology companies. This makes the Spanish market less attractive during periods of geopolitical uncertainty when investors prioritize stability and high-growth opportunities.
Conclusion: The current environment presents a complex web of geopolitical instability, historical tensions, and potential economic disruption, ultimately leading to a volatile market with the potential for negative investment returns.
IBEX35 unmoved by Chinese TariffsThe Ibex will not initially suffer from the Chinese veto on domestic wool, and the tax increase on meat imports. It will do so later. And I will explain why, the index does not weight anything in food, only services, finance, and energy. When Banco Santander and BBVA, the textile company Inditex, the telecoms Amadeus and Telefónica and Iberdrola move, the index moves. What is not going to be seen in this index is the almost 100,000 pig farms that are going to be affected by the increase in the cost of exports to China. Spain is the leading exporter of pork products to China.
A mainly Andalusian business of more than 1000 million per year for a dozen companies that are in danger, added to the 600 million that Catalonia earns or the 320 million of Aragon or the 90 million that Murcia acquires. The Iberian product is a highly valued product in the Chinese market for its quality and is currently one of the strategic markets for Spanish pork and French brandy, as well as other Andalusian products of solera, being the tenth market for Andalusian products and having triple sales thanks to price increases in January. In other words, Chinese business last year represented around 3,000 million euros for Spain. Andalusian companies exported 1,100 million and from Huelva in particular 900 million of copper and metals and other minerals used in the manufacture of photovoltaic panels, electric vehicles, etc., according to Andalucía Trade. Not only that, but oils and manufactured copper are also exported. As well as the agri-food sector, including fruits and citrus fruits, and other types of health foods and nutritional supplements, and of course the luxury sector, architecture and others will be affected.
Already since 2022 the wool veto has forced breeders to manage 9000 tons instead of the 14000 tons that were sold in 2021 according to Interovic data. The problem for Spain is that China, quietly can buy wool from Australia and the bet on synthetic fibers or cotton, have made the sum of the global demand in free fall has made China to have reticence at a sanitary level, but also because of the lack of demand, something that affects Spanish producers. This trend on wool may affect the textile market if a way out of this tr
Given that the IBEX35 lives in its mostly dotcom bubble, the ones that can see the displaced effect of these vetoes and demand reductions in China are the Banks and energy companies, as well as textile companies like Inditex if they do not put a solution to it. A severe drop in food production, bovine textile production and leather production could be reflected in many aspects in different regions and in brands of great power in the indicator. This added to the fact that companies such as Vodafone, one of the strongest telecommunication companies in the country, have been adding "Ere after Ere" since 2013, showing a labor market that fights more for experts in space computing and engineering than for people in more everyday areas, could affect the entire Spanish GDP.
Today, the 19th holiday on WallStreet, we will detect that the European market and in particular the Ibex slows down its movements at a time when it is trying to seek consolidation at the 11,000 points recovered yesterday. Activity levels are likely to be reduced this day, following the lull in risk premiums that has diverted the markets' attention to the rise in crude oil. Yesterday's closing benchmarks having the S&P500 and Nasdaq kissing highs again driven by their tech giants, despite signs of weakness in US retail sales data, has only reinforced the Fed in its sentiment to implement cuts. Meanwhile, European markets seem ecstatic about yesterday's bullish benchmark and with an eye on the "Big Bet" from the ECB and the Fed that seem to be dancing to the same tune. Today, the Bank of England's rate information is of relevance and tomorrow we will see if the interest rate decisions of the euro zone, Switzerland and the United Kingdom. European risk premiums, as we were saying, have given a temporary respite, with France's being the highest.
If we look at the chart, we can clearly see that the current high is at 11,476.05 points set on June 7. And currently the index is fighting in the zone of 11,082 points. If we look at the price bell it is the strongest trading zone at the moment even though it shows a four-pronged bell and two especially prominent ones, being the one with the highs relevant at the moment. Looking at the RSI it is oversold at 45%, so a new attempt to seek higher highs by the bulls would not be uncommon. However, we must take into account the economic situation indicated before with the tariff and sanitary vetoes by China to Spain, because they can do a lot of damage to the economy and this can be reflected in the companies that we have highlighted.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
IBEX35 buy PROJECTION The uptrend of IBEX35 keep strong and we are looking at retracement inorder to enter and place buy trade..
Possible entry at 11180
Good luck
🐃IBEX35 with the 🐮Bulls🐃Already since last Thursday the index tried to force the breakout zone at highs without success, and it seems that since Friday it is getting back on the bulls due to the favorable news in the Eurozone regarding the continuation of the Euro policy. According to President Von der Legen the ECB will not be able to lower interest rates below 3%, and this will cause inflation to take hold across the Eurozone, which will affect productivity, deficits, demographics, etc. Some analysts even mentioned a kind of return to "Japanization" of the Eurozone as it has rebounded to 3.3%. The ECB refers to 5D Inflation (Debt, Deglobalization, Defense, Decarbonization and Demographic Change) wishing to reduce this to 3d inflation (Decarbonization, Deglobalization and Demographic Change), purely inflationary factors according to Commerzbank AG, which have added public spending on these factors. Basically backdated policies will overwhelm "dovish" or rate easing policies, looking for energy transitions and contemplating a demographic winter based on a high number of people of retirement age with no replacement in the short term, pushing up wages. The pressure on defense and the sovereign debt problem are two relevant data also very complicated to adjust in some countries such as Spain in particular.
Given that the economic data in the euro zone are beginning to show the so-called "green shoots" as Norman Lamont, British finance minister in the nineties, later used in 2009 by Bruce Kasman of JPMorgan Chase and wanted to use unsuccessfully the executive of Jose Luis Rodriguez Zapatero and his vice-president and economy minister Elena Salgado in 2020.
It is clear that it is not the same economic paradigm. Although Spanish consumer confidence has shown a slight improvement in April with respect to the previous figure, and PMI data have not been negative, especially in some sectors related to banking and insurance, which are strong, it is also important to remember that the Spanish industrial economy is closely linked to three countries in terms of production: USA, Germany and UK. If these three economies are doing well: "Spain will improve". Therefore, it would not be surprising if the Fed's push towards the US markets as well as a strong FTSE 1000 and the bullish DAX follow-through could be strongly reflected in the Spanish index.
It is possible that Milei's visit has reflected in the referential in positive on Monday, due to this affinity with the VOX party and this blow to the socialist executive of Pedro Sanchez. But above all what the price has reflected is that Inditex (ITX), Mango (private group), Tendam (Cortefiel group which is 100% private) are 1.62% of the national GDP and represent 60% of the added value generated by the entire fashion sector as a whole (AFI). IBEX companies in general have performed well, with energy and banking companies standing out. In addition to BBVA's attempted takeover bid for Sabadell.
If we look at the chart of the IBEX35 (Ticker AT: ESP35), we can see that since May 9th it has started an upward trend. Forcing an unsuccessful attempt to overcome the 11,384.44 points and this week has started in positive looking for that direction again. There are no bullish signals on the volume bell as it marks a possible return to a price zone near the lows. And the RSI gives no sign of a possible trend although it is slightly oversold at 59.70% which is not surprising in a market with a bullish start to the week. An attempt to test the highs and a return to 11,252 points would not be surprising.
Ion Jauregui - AT Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
SHORT IBEX 11.300 - Target 10.400I expect next 2-3 months pullack in Spanish Overall Index: IBEX 35
Short 11.300 with target 10.400 to close shorts.
Regards,
