Nearly 5 months of 2016 have passed and, after flirting with the 10,000 level, the Ibex 35 index closed at 8,700 last week, accumulating a 9% drop over the year so far. This shows that the stock market has become the most reliable expression of the lack of confidence in the world of money, although confidence is a concept which is too intangible and a mix of factors which are often not very solid.
F. Barciela /F.G. Ljubetic |The stock market valuations of new technology firms have reached dizzy heights in the US over the last few years. And it doesn’t look as if their stratospheric rise has stopped. Google, now Alphabet, has a stock market value of 491 billion dollars, while Apple’s is 484 billion. Facebook is worth 345 billion dollars and Amazon 337 billion.
Isolux is a Spanish midcap which operates in the construction business and in the maintenance of large infrastructures in over 40 countries. It has been forced to reach an agreement with its principal creditors to avoid bankruptcy.
The Corner | The Basel committee intends to impose new capital requirements on the banks relating to off-balance sheet assets. The purpose of the international organisation’s move is to mitigate the risk of a bailout of financial products like investment funds and/or securitisations.
The steel industry’s current crisis led the OECD to celebrate a summit in Brussels. The objective was to reduce capacity in the industry but, according to some sources, no agreement has been possible. China is not prepared to cut its production or its exports.
F. Barciela / F. Gil Ljubetic | If there had been a recovery in the Ibex 35 companies previously, it’s clear that this has stopped or slowed in the January-March period. Amongst those which have already presented first quarter results, very few have given investors much of a reason to be happy.
BARCLAYS | Gamesa posted a very solid start to the year with sales growth of 30% driving a 6% beat to company-compiled consensus. EBIT beat by 24% as the Group margin reached 11.2%, up 330bps year on year. Free cash flow was negative €107m (by our calculations), a solid improvement versus Q1’15’s -€267m in what is always the weakest quarter of the year.
BARCLAYS | New unplanned outages look unlikely to abate in the next couple of months, which have contributed to a tighter 1H16 oil market balance and new variability in the price forecast.
Spain’s second biggest bank BBVA said it posted a 53.8% drop in net profit to 709 million euros in the first quarter to March from a year earlier. The bank explained that quarterly results were hampered by a number of factors, including the impact of exchange rates, lower results from NTI and the lack of corporate operations.
UBS | The increase in positioning as of the latest CFTC report dated April 12 confirms persistent interest to hold gold and in a sense highlights that patience among market participants is becoming increasingly stretched. Many have been waiting for a deeper price correction to build gold positions or to add to current longs, but this has so far been elusive.