Uncertainty about the extent of the Fed's rate cut keeps investors on tenterhooks. Thus, European stock markets closed with moderate declines. The Ibex also ended the upward trend that began just before the ECB rate cut and ended the session with a decline of 0.16% and will start again tomorrow from 11,684.70 points.
On rare occasions, a few hours before knowing the outcome of the meeting of the Federal Reserve has maintained a level of uncertainty as high as today about its final decision. Doubts, normally, were limited to the message it would send about the next monetary movements in the United States. This time Investment firms remain divided on the size of the reduction that will be announced today: the usual 25 basis points reduction or a more aggressive 50 basis points reduction.
In recent days, markets have been building expectations of an aggressive 50 basis point cut. But far from limiting uncertainty to the Fed's decision today, analysts' doubts extend to How will the markets react?. A 25 basis point cut might not meet the expectations generated. In turn, a 50 point cut, even if it would mean a double stimulus for the economy and businesses, could amplify warnings of a macroeconomic deterioration.
Uncertainty surrounding the Fed this time paralyzed yesterday Wall Streetwith both the Dow and S&P 500 trading up less than 0.1%. Today's session also minimizes the moves. Investors are postponing portfolio adjustments until they know the final outcome of today's Fed meeting.
Ibex 35
THE Spanish Stock Exchange It was infected by the lack of definition prevailing in the markets. The day in Europe ended without yet knowing the final decision of the Fed, hence the caution that dominated indices such as the Ibex. The Ibex stopped its rally and dropped a slight 0.16% to 11,684.70 points, after having chained five consecutive sessions of increases.
Investors have focused their adjustments on companies most involved in corporate operations. Grifols It is lagging behind the Ibex with a drop of 2.00%, awaiting new clues on the takeover bid being studied by Brookfield. Shares of rovifor their part, fell by 0.07%, with the market paying attention to the improvement in the recommendation issued by Exane BNP and to the negotiations on the sale of its third-party drug manufacturing division.
Mapfre stood out in the advances, boosted by 2.23% during a day in which Goldman Sachs transmitted favorable outlooks on the entire European insurance sector.
Interest rate sensitive utilities are now at the bottom of the selective. Sales have made their way Naturgie (-2.43%), Enags (-2.20%), Redeia (-1.56%), Endesa (-1.63%) and Iberdrola (-1.09%).
European Stock Exchange
THE European actions closed with moderate cuts pending news from the Fed late today. Central banks will continue to be in the spotlight tomorrow when the Bank of England meets. Ahead of its decision, UK core CPI rose to 3.6%, further reducing the chances of another rate cut. The UK Ftse is lagging somewhat, falling 0.68%. Germany's Dax fell 0.08%; France's Cac 0.57%; and Italy's MiB 37%.
The day was marked by several important corrections on European stocks. The largest company by capitalization, Nordiskfell 2.3% in the face of pressure in the United States to reduce the price of its obesity drugs. The cuts were 14.2% in France carmat in response to the announcement of a capital increase. The penalty was 7.5% in Italy Campari and 10.1% in Sweden Hexatronicsconsequence in both cases of the departure of their CEOs.
Euro, debt, oil, gold and bitcoin
The lull in markets could last until the end of the day, when the Fed will have lifted the uncertainty about the size of its rate cut. euro It remains at the level of 1.11 dollars. The book The British, meanwhile, are bouncing back to the $1.32 limit after the UK core CPI rose.
Much like traders in the foreign exchange market, bond traders focus all their attention on the Fed. debt interest They have cut their last descents. The required yield on the ten-year US bond is 3.70%. In Europe, the interest rate on the German Bund is at 2.20%, while that of the ten-year Spanish bond is back at 3%.
The strength of the economic stimulus measures approved by the Fed could also affect the outlook for demand. oil. The barrel of Brent stops the gentle rise of the previous two days and remains stuck at 73 dollars. The barrel of West Texas, the reference in the United States, falls below the 70 dollar mark.
The quote from gold waiting for news from the Fed before attacking the historic records reached at the start of the week. The precious metal is currently stuck at the $2,600 per ounce limit. The crypto market is adopting a more bullish tone. It Bitcoin It is listed below $60,000.