Just a year ago, world stock markets hit lows after months of trying to recover the rate from the shock caused by the pandemic between the months of February and March 2020. After a first acceleration in purchases during the three sessions that followed the 29th of October, until the miracle took place on November 9. San Pfizer announced an effectiveness greater than 90% of what was the first vaccine against Covid-19 and the sky was opened.
From then on, the markets, until that moment dominated by the most defensive firms, began a rally that has been limping for months to continue. The Ibex 35, twelve months later, shows a revaluation of 40%, in tune with the rest of the large markets, such as the EuroStoxx 50, at 43%, and the S&P 500, with an increase of 39%.
The photo is different if you look at it with a greater perspective. Has the Spanish stock market recovered from Covid? No. And not only that. It is the only index among the large continental ones that has not done so. It is still trading 10% below the levels it had on February 19, the last session prior to the first black Monday of the pandemic.
The Italian stock market, the most similar to the Spanish one due to its relevant banking weight, is 6% above pre-Covid levels, thus opening a gap with the Ibex of 15 percentage points. The Dax is the most advanced in Europe, 13% higher, and the S&P 500 is already 34%. Both are in the area of all-time highs, although the market has been anticipating a correction for several months., a sensation that has been accentuated in recent weeks.
What reasons make you think about it? Mainly, the constant downward revisions of the recovery of the economies in 2021; plus a supply crisis unprecedented in decades; runaway inflation – in the face of the rebound in energy prices – that will put the purchasing power of households on the tightrope; And, among all of them, there is also a concern about a possible fall in technology stocks, which have been the ones who have guided the stock markets in recent years in the face of problems in meeting demand that could worsen during the most consumerist time of the year: the one that It runs from Black Friday, at the end of November, until Christmas .
And this is a problem for economies like the United States where consumption represents two-thirds of GDP.
Winners of the crisis
Even if a correction could come, this, say firms like JP Morgan AM, would not be of the depth of the views at the beginning of 2020, if not more “a way to take a breath . ” Citi, which collects weekly how index futures are performing, continues to record “a downward trend from investors” and “a positioning that continues to become more negative.” It happens in the US and also in the European indices, with “one exception, the banks” that “maintain a modest positive trend.”
With inflation at 5.5% in Spain , according to the preliminary CPI data released yesterday, prices continue to force central banks to raise interest rates. Mapfre Economics rules out that they are going to “alter their roadmap” which will also avoid past mistakes such as “the financial monetary setback of the 2013 taper tantrum or the monetary policy slippage of the ECB in 2011”, they point out.
What is expected, according to what Christine Lagarde has said, is that at the end of December it will be announced how the ECB will carry out its progressive withdrawal of stimulus starting, predictably, from the month of March.
European banks, for their part, are already trading at levels prior to the pandemic, a milestone that was consolidated this week. Even so, it maintains historical discounts on its book value -which among the large Spanish companies is around 30% -. Sabadell, especially, together with Santander, CaixaBank and Unicaja, are still trading at levels below February 2020. BBVA is at 2018 levels. Today it presents quarterly results.
However, the rally that Pfizer started has been characterized by the cycle. Sabadell is the most bullish company on the Ibex, with gains of 157%, and BBVA also ranks among the top positions – 146% up -, and Bankinter and Santander above 106%. In the index there is no one more cyclical than ArcelorMittal, which has added 151% since then, with Repsol – another 132% – and Acerinox, 97%.
18 firms still suffer losses
Despite the stock market rally , a year and a half after the start of the pandemic, 18 Ibex stocks are trading below pre-pandemic levels, without being able to recover. The furthest of all continues to be IAG, 63% below, followed by Grifols (39%); Telefónica (with 33% losses since February 19, 2020), and of the two Socimis, such as Colonial and Merlin. Fluidra stands out in the upper part, which today is worth 182% more than it was capitalizing then.