Wednesday, August 10

Ómicron and the fear of inflation take the IBEX 35 to the red

The IBEX 35 closed on Monday with a loss. It managed, however, to come back from its lowest level in more than 10 months, reached at the opening.

Investors reacted to the increasing odds of facing a Christmas period cut short by coronavirus restrictions. They also expressed their monetary policy fears.

For these purposes, the IBEX 35 took over with the rest of the world’s stock exchanges: they fear – in addition to omicron – a possible political death blow to the bill on domestic spending in the United States, which amounts to 1.75 trillion dollars.

“There has been a kind of triple shock to the economy over the weekend: omicron, the Fed and the withdrawal of the cat initiative in the US,” said Jack Ablin, chief investment officer at Cresset Capital Management.

“The market is receiving a setback. I think it is an economic restart that investors are calibrating.”

While the Covid-19 restrictions cloud the prospects for economic growth, there is a risk of keeping inflation high. This would lead central banks to consider raising rates.

During the week there will be special interest in the publication of the US price evolution indices, which could influence the path of the Federal Reserve.