The European stock markets continue to fall this Wednesday. Madrid (-1.2%), Frankfurt, London and Milan have fallen over 1%. Paris was the worst performer dropping 1.8%. The Spanish selective endangered the support of 9,025 points. Within the index, Colonial has closed upwards with a rise of 0.8%. On the opposite side, strong cuts by ArcelorMittal (-3.8%) as it announced that it is preparing new production adjustments in Europe. Ahead, Ence repeats as a red lantern and has left 4%.
The decreases in Europe occur amid concerns regarding the trade war between the United States and China and the political tensions in the Old Continent, with doubts about Italy. It should also be noted that Wall Street, which performed badly, falls again with enthusiasm on Wednesday after Asia followed suit. Bolsamanía experts warn, also, that the US indices are right on supports and warn that the 2,800 S & P are at stake.
Uncertainty continues to dominate the market in relation to the trade war after Donald Trump said earlier this week he was "not ready" to make a deal with China, adding that tariffs on the country's imports could increase "substantially" . Meanwhile, a Chinese official hinted Tuesday that Beijing could use its strength in the production of rare minerals as a lever in its trade dispute with the US.
Back in Europe, fears about an upcoming battle between Brussels and Italy are on the rise after reports that the EU is considering taking disciplinary measures because the Italian government has not been able to control its debt.
Italian Deputy Prime Minister Matteo Salvini has said that Rome could be the target of a 3bn euro fine due to the mounting debt. A European official told CNBC he can not confirm whether Italy will be fined, but added that the EU executive had "some concerns" about the country's fiscal trajectory.
In fact, this Wednesday the European Commission has taken the first step to open a procedure for excessive deficit against Italy claiming there was a lack of measures to reduce its public debt, which in 2018 exceeded 132%.
On the other hand, the latest economic data that has been released has been disappointing. On Tuesday, the German consumer sentiment indicator fell to its lowest level in two years. This Wednesday the unemployment rate in Germany was published, which rises from 4.9% to 5%, when it was expected to repeat the figure.
In addition, the European Central Bank has published its bi-annual report on Wednesday on the possible risks for financial stability in the Euro Zone.
FIXED RENT
And in the midst of all of this, the yield of the Spanish bond to ten years is a suprise for the third consecutive day because it is at historical lows. The national debt is gaining attractive as an alternative to the Italian public debt, after the country announced its intention to exceed the deficit limit allowed by Brussels.
In this sense, the Spanish risk premium has been placed at around 90 basis points, while in Italy it has exceeded 280 points.
TECHNICAL ANALYSIS
According to José María Rodríguez, Bolsamanía's technical analyst, "the Ibex respects the support levels." In the last two weeks we have talked about the normality of a rebound of some intensity and then attacking again the important short-term support, the 9,025. And that, depending on whether it managed to rebound from those prices or drilled them, we would have more information about whether we could try to build a market floor or that a new bearish leg would be confirmed. "
"Corrective movement that could take us to the area of 8,800 points (61.8% adjustment) after stopping at the intermediate support of the 8,940 points (50% backwards) .Thus, for the moment the support has been respected. We have caressed it and it has reacted ten points ".
Rodriguez added that "we musn't judge too soon because there is still a lot that could happen, especially since we have the Dow Jones below the support of 25,200 points and the S & P 500 below 2,800 points. If it were to close like this, and the lower the worse, new corrective signals would be activated on the other side of the Atlantic. This would come as a result of the confirmation of several 'head and shoulders' that can perfectly lead the US indices at around 5% lower ".
"Therefore, and as a summary, it looks like a rocky road ahead for global equity in the short term" he concluded.
