Nicolás López (Singular Bank) | Friday’s session closed in Europe with a mixed tone and slight variations in the main stock market indices. After the rises of the last few weeks, which have brought the indices back to their highs before the banking crisis, investors have been cautious in general as they wait for new references. In particular, the results season that has just started and the central banks’ meetings in the first week of the year are the next references for investors to assess the sustainability of recent advances.
Stability has been the general tone during the week, which started with slight gains to close with little change compared to the previous week. In Europe the Euro Stoxx 50 and the Ibex 35 closed the week with gains of less than 1%, while in the United States (at the close of the European session) the Nasdaq declined by around 0.5% in the week.
At the sectoral level, in Europe the technology sector, down by 3.5%, the sector that had risen the most in previous weeks, was the most notable. The energy sector was the second worst performer, down 1.5%, dragged down by the oil correction. The automobile sector was penalised after Tesla’s announcement to lower its prices and to focus its strategy in the coming years on growth, even at the cost of lower margins, which could set off a price war in the sector. On the positive side, the consumer staples sector stood out with an increase of 2.5%.
In Asia-Pacific, meanwhile, the stock markets closed with a majority of declines led by the Chinese stock markets, in view of the growing geopolitical tensions between China and the United States. In this regard, yesterday, Thursday, the US president declared that he seeks to impose limits on US investment in the Chinese technology sector. In today’s trading session, the CSI300 Shenzhen and Shanghai stock exchanges fell 1.96%, while the Nasdaq Golden Dragon China Index of US-listed Chinese technology companies lost 2.3%. The rest of the region’s indices maintained a more sustained tone, closing the session with mostly slight gains.
At the sectoral level, the technology sector (-3.5%), the sector that had risen the most in previous weeks, was the most notable in Europe. The energy sector was the second worst performer (-1.5%), dragged down by the oil correction. The automobile sector was penalised after Tesla’s announcement to lower its prices and to focus its strategy in the coming years on growth, even at the cost of lower margins, which could set off a price war in the sector. On the positive side, the consumer staples sector stood out with an increase of 2.5%.
In Asia-Pacific, meanwhile, the stock markets closed with a majority of declines led by the Chinese stock markets, in view of the growing geopolitical tensions between China and the United States. In this regard, yesterday, Thursday, the US president declared that he seeks to impose limits on US investment in the Chinese technology sector. In today’s trading session, the CSI300 Shenzhen and Shanghai stock exchanges fell 1.96%, while the Nasdaq Golden Dragon China Index of US-listed Chinese technology companies lost 2.3%. The rest of the region’s indices maintained a more sustained tone, closing the session with mostly slight gains.
Fixed income
Fixed income also had a stable week after the previous week’s spike in yields. In general, investors continue to wait for the upcoming central bank meetings, although today’s session was dominated by yield rises after the publication of better than expected PMI data in the US. The composite PMI came in at 53.5, its highest level in a year and the fourth consecutive month that it has remained in expansionary territory above 50 points. On the downside, the prices paid index also rebounded to its highest level in seven months, reflecting the inflationary risk stemming from the economy’s resilience.
Thus, yields on the main Eurozone sovereign bonds closed higher. The benchmark bond in Europe, the bund (German 10-year bond) has rebounded 4 bps to 2.48%, while the Spanish benchmark has risen 4 bps to 3.51% and the Treasury 3 bps to 3.56% .
