Monday, January 24

The IBEX 35, the 8,300 points and the bonds

In mid-November, the IBEX 35 was trading above 9,000 points, but just over two weeks later it marked a level below 8,300 at the close of this Friday.

“Technically, the thing is very ugly. We lose a base of draft, it was expected that today we would start the session with good prospects due to the closure that took place [el jueves] on Wall Street, ”explains Josep Codina, chief analyst at Investment magazine, in this podcast of

In his view, the bad employment data in the United States ended up pulling the markets down. “And the IBEX 35, as it seems the donkey of all clubs, has taken a good beating,” explains the expert.

The upward path of the IBEX 35 in the year invited us to think with a close of 2021 at 9,300-9,400 points. But now, the market looks lower.

“The positive expectation we had has been truncated, the IBEX 35 had a pattern of continuity that made us even think about 10,000 points. The context has completely changed, especially as a result of the turn of [Jerome] Powell of the transitory nature of inflation ”, justifies Codina.

According to the analyst, “the market was betting on believing the Fed and the rest of the central banks”, but the picture has changed after Powell confirmed what many investors already anticipated: inflation is here to stay.

Where to seek refuge?

Faced with the inflationary scenario, many have chosen to take refuge in bonds.

Although in the sovereign debt market investors are betting “on short terms”, according to Codina, those who are gaining the most are corporate bonds, since in sovereigns they start with a loss “of 5 percent just for buying them” in this inflationary situation.

Regarding refuge values, Codina is clear: “the most defensive, such as the health sector, and technology, even though it is suffering, will continue to be a winner in the long term.”

“Robotics, construction, everything that has to do with infrastructure, since now the central banks could apply some rate hike due to inflation, and these sectors may benefit in the medium term,” explains the analyst.