Monday, January 24

Stock markets: optimistic vs pessimistic

The market is divided. That’s right. Both optimists and pessimists have plenty of arguments to convince their opponents.

The battle is served these days in the stock exchanges between investors who, as announced by Pfizer and Biontech, they trust that a cycle of three doses of their Covid-19 vaccine will serve to neutralize omicron.

And those who fear that governments will continue to take restrictive measures to curb the spread of the virus, as Boris Johnson has done in the UK.

The images this week of the Champions League matches played in Munich and Salzburg without an audience they have been very hard. It seemed that stadiums without fans were a thing of the past.

But those meetings in which precisely two Spanish teams participated, Barcelona and Sevilla, have recalled that the worst days of the pandemic can return, that they have not gone away for good.

Stock markets alternate rises with falls

For this reason, these days in the stock markets the rises and falls alternate, some days the optimists triumph and others the pessimists.

As it points Guy Miller, Market Strategist at Zurich Insurance, “In the short term, seeing where the markets are going is a real challenge.”

Although it is true that so far it seems that it is the optimists who are prevailing, because most of the world indices have already recovered the levels lost at the end of November, when from South Africa the irruption of omicron was announced and the shares collapsed .

These indices are once again very close to all-time highs.

The IBEX 35 exception

However, we find some exceptions, such as the IBEX 35, which is still far from returning to last month’s levels.

It plummeted in the last days of the month from 8,800 to 8,300 points and, for now, it continues to penalize for 8,400 points.

If we look at the positive side, it is very possible, because there are wickers for this, that the end of the year rally will take place.

And given the delay accumulated by the Spanish indicator, it is possible that it is one of the outstanding ones, because it has a longer route.

A truce in the battle between optimists and pessimists

In any case, this battle of optimists and pessimists will have a truce starting today.

Again the market will be paralyzed waiting for it to be published the CPI of the United States of November. Forecasts point to an escalation to around 7 percent.

If the analysts’ calculations are met, prices will stand at 6.8 percent, from 6.2 percent in October.

Investors will also look sideways at other major milestones in the United States, such as the University of Michigan consumer confidence, which will lose steam in December.

The data anticipated by the market consensus is 67.1 points, compared to the 67.4 registered in November.

Before the German CPI will be known, although here it seems that the same data from October will be repeated, so it will be set at 5.2 percent.

And the central banks return

These figures will open the doors to the meetings of the central banks on December 15 and 16. They are the big dates that investors have set for the next few days.

We are talking about figures (those of the CPI) and facts (the decisions taken by central banks after having these data on the table).

From there optimists and pessimists will return to the load, to make interpretations about the effectiveness of the vaccines against omicron or about the nature of this variant.

But it will be the US and European central banks that finally tip the balance.