European Stock Market Finds In ‘Chinese Disappointment’ A New Obstacle To Continue Its Advance

The stock markets in Europe cannot start the week by prolonging the optimism of the last sessions. The desire for a greater appetite for risk, supported by greater confidence in a robust growth of the global economy, has been met this Monday with a figure for GDP growth in China that is lower than initially expected .

The market consensus collected by Bloomberg expected a significant slowdown in the rate of economic growth of the Asian giant to be confirmed , since it was estimated that the GDP growth would fall to 5% year-on-year, the lowest rate that has been seen since third quarter of last year. However, the 4.9% announced today is even lower and threatens to further weigh on the asymmetric global economic recovery.

One more stone on the way for the continental stock market towards the resistance of 4,215 points in the EuroStoxx 50 , which is 0.8% away from the levels at which the selective begins the week. ” The risks that we may see a new bearish leg in the correction of recent weeks , which could even lead the world indices to lose the minimum of fifteen days ago, remains fully valid, ” says Joan Cabrero, technical analyst and Ecotrader advisor .

Slopes of China’s GDP and PMIs in Europe and the US
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Something that could take shape if the market continues to focus on the risks to growth posed by inflation and the rest of the uncertainties that the market has encountered lately , whether of Eastern or American origin.

And it is that each dollar that increases the price of oil increases the fear of a rebound in inflation that would end up putting pressure, in the long run fearsome, on central banks. Not surprisingly, the ultra-expansive policies that were once undertaken by the most important monetary entities on the planet (ECB, Fed, BoJ, BoE …) already seem a thing of the past and now the rumors point to an increase in interest rates before the end the year in many of these entities.

Pending results season and Ibex 35
Another catalyst that can help the balance tilt in the coming weeks in one direction or another is a season of results that is expected to show a substantial increase in profits both in Europe and on Wall Street. And it is that the profit forecasts of the consensus of analysts that FactSet collects for this quarter point to an increase in earnings per share compared to the same period of 2020 of almost 55% for the Stoxx 600 and 50% for the S&P 500.

In this context, firms such as Phillips, Deutsche Boerse or ASML will announce their accounts throughout the week and can pay the way for lagging indices such as the Ibex 35 , which still has homework to do at the beginning of the week still below the 9,000 integers .

“Everything indicates that it is a matter of time before the Ibex 35 ends up overcoming that resistance , but at this point the ideal thing is to wait for it to get it before buying more Spanish equities since while it does not get it, it cannot be ruled out that we can to see a new relapse that will not be dangerous as long as it does not lose key supports of 8,550 points, “says Cabrero.

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