Fears of a recession continue to unnerve investors. After opening the session this Tuesday with moderate increases, the European stock markets have turned around and have accelerated their falls. The Ibex 35 has closed the day with a loss of 2.48% and has thus lost 8,000 points, until falling to the lowest level since the start of the war, when the stock market operators panicked. Frankfurt, Milan and Paris have also fallen by around 2%, with the single currency hitting 20-year lows against the dollar. On the other side of the Atlantic, Wall Street is dyed red from the first bars of the day, with the Dow Jones and the S&P 500 losing almost 2%.
Within the Spanish selective, Caixabank, Repsol and Sabadell are the most punished values, leaving more than 4%. On the other hand, Cellnex, Fluidra and Solaria are the only ones listed in green, although the increases that are noted do not exceed 2%. Nervousness is perceived among stock market operators, who already have their sights set on business results for the second quarter of the year, says Diego Morín, a market analyst at IG. “We will have more data on the impact of inflation and the spike in energy prices on your accounts. We will have to wait for a break through one of the mentioned levels, otherwise, the Ibex will continue embedded in the side”, he adds.
The release of the PMIs, a leading indicator of economic activity, has fueled concerns about slowing growth. Although the expansion of both the manufacturing industry and the services activity remains solid, the increase in prices reduces the budgets of companies, which on many occasions are forced to pass on the rise in costs to their clients, already subjected to strong pressure to control their spending.
As central banks tighten monetary policy to curb runaway inflation, fears of a recession continue to cause volatility in global stock markets. “With the first half of the year passing in the rearview mirror, investors can’t help but wonder what lies ahead in a year that has so far generated elevated levels of uncertainty, rattling asset class values across the spectrum.” John Stoltzfus, chief investment strategist at Oppenheimer & Co, warned in statements collected by Bloomberg. In fact, the chances of a recession in the United States next year currently reach 38%, according to the latest forecasts from the economic agency.
After the Independence Day holiday, Wall Street has resumed its activity, with investors generating a high trading volume. In the United States, the two main events that the market is expecting this week are the minutes of the meeting of the Federal Reserve and the employment report in June, which will be released this Wednesday and Friday, respectively.
