February has started as January began, with a bullish festival in the markets. This optimism faces today’s macro review of the official US employment report. Until then, the Ibex has cooled its 4.7% climb, in search of a full week of gains, although this time without the extra boost from Santander and BBVA.
At the beginning of February, the markets are repeating the same pattern as at the beginning of January. The year began with a renewed dose of optimism, and among its results, the Ibex rose more than 4% in its first week. The following three weeks, however, saw a downward trend that more than wiped out the gains of the first sessions. The beginning of February changed the course of the markets, and the Ibex gained 4.7% in the first four days of the month.
The wave of corporate results is surprising analysts, with a predominance of favorable surprises. The better-than-expected company accounts are therefore better prepared for the long-awaited recovery. The new billion-dollar stimuli being finalized by the US, the containment in the rate of contagions and the expected increase in the supply of vaccines against Covid point in the same direction, towards an economic recovery.
With this renewed dose of confidence, investors face a key macro reference every month, the publication of the official US employment report. The January figures already point to a recovery. Analysts’ forecasts predict job creation of 50,000 jobs, compared to the 14,000 jobs destroyed in December. The unemployment rate could repeat the 6.7% of the previous month.
One of the questions raised by this expected recovery scenario is the degree of homogeneity in the pace of growth. For the moment, China has been leading the economic recovery for months, thanks to its greater control of the coronavirus. The vaccination phases in the UK and the US are much more advanced than in Europe, and this is clearly reflected in the currency market. The euro is the big loser. The EU currency is consolidating below 1.20 dollars, at a two-month low, and falls to its lowest level since May against the pound. The British currency is holding near the $1.37 level.
European equities are trying to follow the upward trend in Asia and Wall Street. Expectations of a recovery are rekindling the debate about an imminent return of inflation, and investors have reacted in recent days with sales in fixed income and purchases in equities.
The Spanish stock market has its work cut out today to continue its bullish streak, which coincides with the start of February. The Ibex is one step away from full weekly gains, after adding 4.7% in the previous four days from the 7,757 points at which it closed last Friday. The Ibex is today limited to consolidating the 8,100 points gained yesterday.
Banks are once again in the investors’ sights after yesterday’s sharp rally at the end of the day. Comments about future inflationary pressures as the recovery progresses have accelerated increases in debt interest rates, a factor that is an incentive to take positions in banks. Their recent results and the return of dividends have reinforced their attractiveness. BBVA and Santander are trying to consolidate the 7.5% and 5.3% increases achieved at yesterday’s close, and a rally that has boosted their stock market value by 8.5 billion.
The last day of the week opens the door to a new rebound in the share prices of the companies most closely linked to tourism. The announcements of an increase in the number of available vaccinations have made the outlook for the summer season clearer. Amadeus, Meliá, IAG and Aena are among the strongest stocks on the Ibex.
ACS is the most notable advancer. Its shares are close to the level of 27 euros in a day of strong rises in a company in which the Spanish company has a stake, such as the French Vinci.
The rest of the European stock exchanges are also striving to maintain their upward pulse. The weakness of the euro is also a stimulus for the most export-oriented European companies, especially for the members of the German Dax. In the case of the Italian Mib, rallies have been triggered during the week to celebrate the appointment of Mario Draghi to form the Italian government.
The results season is once again giving companies such as Vinci, the French construction and concessions group, a free hand on the stock market. Its better-than-expected accounts boosted its share price by nearly 4% on a Paris stock exchange where the banking giant BNP Paribas received its results with smaller changes. PostNL’s rises are triggered by the ‘buy’ recommendation issued by Jefferies analysts on the courier company.