Bitcoin exceeds US$100,000 and the Ibex reaches 12,000 points. The markets digest the fall of the French Government smoothly. The euro and France’s risk premium falter even with timid improvements. The mini-truce from abroad allows the Ibex to activate a sixth consecutive rise and hit 2010 highs above the 12,000 point barrier. Banks shine at the forefront of advances.
The references to monitor multiply. Added to all the news that today’s session brings are the two key events that took place late yesterday: the messages from the president of the Fed and the vote of confidence in France. The intervention in a forum by the president of the Federal Reserve, Jerome Powell, confirmed the prospects of a further slowdown in the pace of rate cuts, largely due to the firmness of the US economy.
The vote of the motion of confidence in France confirmed all the predictions, putting an end to the Barnier Government. The French country now faces a period of political and economic uncertainty. The fall of the Government has not caught investors by surprise, which is why France’s risk premium avoids new shocks, and repeats its highs in more than a decade, at 85 basis points.
France’s risk premium consolidates levels, and in the currency market the euro even threatens with timid increases against the dollar. The community currency is strengthening at times above the level of US$1.05.
The possible slowdown in the Fed’s rate cuts suggested yesterday by its president does not prevent the market from continuing to bet on a 25 basis point cut for the Federal Reserve meeting on December 18. The British pound is also strengthened, with intraday highs above US$1.27.
Ibex 35
The Spanish Stock Market receives with relief the aplomb with which the markets receive the fall of the French Government. The Ibex, on a roll since the beginning of December, stands out in Europe and records its sixth consecutive rise. In its climb, it signs intraday highs above 12,000 points.
On September 27, it already briefly surpassed this barrier, although at the closing it could not maintain this threshold. If this momentum continues throughout the day, the Ibex would close above 12,000 points for the first time since 2010.
The banks are the main drivers of the Ibex’s assault on 12,000 points. The greater stability in the debt market, despite the crisis in France, and the possible containment of rate cuts expand the stock market rally that the financial sector is experiencing this year. The increases achieved today by French banks extend to Santander and Bbva, which at times exceed 3% increases. Sabadell, CaixaBank, Bankinter and Unicaja support the progress.
The positive tone extends to other cyclical values, such as the steel companies Acerinox and ArcelorMittal, and persists in the star value of yesterday and of the year on the Ibex, IAG, still encouraged by the optimism conveyed by JPMorgan. Furthermore, a heavyweight like Inditex is testing new historical highs with less than a week left before the validation of the publication of its results.
Among the most lagging values, Repsol repeats itself, stuck near annual minimums, and companies favored by a scenario of greater rate cuts sneak in. Utilities and Socimis such as Naturgy, Endesa and Merlin suffer to join the generalized increases in the Ibex.
European stock market
European equities are digesting the fall of the French Government calmly and even with increases. The falls accumulated for months by the Cac of the Paris Stock Exchange give way to a timid rebound today. Furthermore, on the other side of the Atlantic, the combination of economic strength and rate cuts that the Fed president advanced late yesterday in his messages is pleasing to investors. The pan-European Stoxx 600 index is trying to reach 520 points.
The Paris Stock Exchange today has the notable boost of French banks. BNP Paribas, Crédit Agricole and Société Générale are pricing the biggest respite in France’s risk premium higher. The advances extend to Vinci, one of the French values that represent a unique opportunity to enter as a result of the French political crisis, as JPMorgan analysts emphasized today.
In the case of the French company Ipsos, the revaluations originate from the decision not to launch an offer for Kantar Media. Outside of the French Stock Market, the German Puma receives with increases the recommendation improvement issued by Oddo, and HelloFresh shoots up to 10% with the buy advice issued by Jefferies.
Debt, oil, gold and bitcoin
Equity investors breathe with containment in France’s risk premium and debt interest. The required yield on the ten-year French bond drops below the 2.90% threshold at times. The German bund falls below 2.10%, compared to around 2.75% in which the Spanish ten-year bond moves. In the US, the interest rate on the ten-year bond is quoted at the level of 4.20%.
Bond market operators monitor the inflationary tensions brought by the oil market on a day marked by the Opec+ meeting. The barrel of Brent is stuck at the threshold of US$72, awaiting the production strategy revealed by Opec+. The West Texas barrel, the benchmark in the US, falls below US$69.
The price of gold replicates the slowdown in oil. Futures of the precious metal remain close to US$2,670, in a historic day in the crypto market. Bitcoin, after nearly three weeks colliding with the barrier, has managed to surpass US$100,000 for the first time. The appointment of Paul Atkins to be the new president of the SEC has finally broken the resistance of US$100,000, in anticipation of more favorable regulation in the US for the crypto universe.
