The Ibex once again moves above five figures. Few levels acquire such a symbolic character in the Spanish selective index as that of 10,000 points. It was reached for the first time in March 1998, in the middle of the rally before the dot.com bubble burst. It seemed doomed to the past when in 2007 the Ibex hit historical records on the verge of 16,000 points. But the global financial crisis ended up erasing this level again. During the following decade, the degree of intensity of the debt crisis conditioned the achievement or loss of 10,000 points.
It was just before the outbreak of the Covid pandemic, on February 17, 2020, when the Ibex regained this threshold. Just two days later, on February 19, 2020, the selective index signed its last close, until today, above 10,000 points. On that day the Ibex finished at 10,083 points. The magnitude of the health, economic and stock market crisis unleashed by the pandemic ended up plummeting the Ibex to new lows, at the level of 6,000 points, three years ago.
The bullish turnaround started in a historic month, November 2020, the most bullish of the entire Ibex series with a rally of 25%, the result of the euphoria unleashed then by the progress in vaccines against Covid. The Spanish selective index, still in a pandemic, consolidated its comeback in 2021 until at times approaching 10,000 points, before crashing in 2022 in the midst of a maelstrom of interest rate increases aggravated if possible by the inflationary effects derived from the outbreak of the war between Ukraine and Russia.
Pessimism then took over the market. With runaway oil and gas prices, and with central banks in the midst of adjusting upward rates, analysts anticipated an economic recession and the Ibex sank to around 7,200 points in October of last year. It was again the month of November that saw an upward turn in the stock market in an early Christmas rally.
The beginning of 2023 gave free rein to optimism among investors as they confirmed the resilience of the economy. The strength of consumption and the boom in tourism after the pandemic finally avoided the announced recession. The Ibex stood out in the increases in Europe supported by one of its most weighted sectors, the banking sector, as the increase in debt interest gained greater prominence in the markets.
The stock market downturn registered since the summer, amid the economic and business doubts unleashed by the escalation in financing costs, has given way, again in November, to an upward turn. At the end of October, several firms already suggested a possible turning point in the markets. The step back from the Federal Reserve in the aggressiveness of its messages and the progress even greater than expected in the desired 'disinflation' process, especially as a result of the latest CPI data from the United States, have deflated debt interests and they have generalized the increases in the stock market to a greater extent.
The Ibex establishes itself among the most bullish European indices of 2023 thanks to the near 10% rally in November. This percentage represents half of the 20% revaluation that has accumulated so far this year, and which places the Ibex at the head of the main European stock market indicators only behind another highly weighted index of the banking sector such as the Italian Mib .
The 20% gain of the Ibex far exceeds the 15% progress achieved by the German Dax in the year, the 12% of the French Cac and the 8% of the pan-European Stoxx 600 index. The British Ftse is even further behind, at record a flat balance (0%) in the year.
This bullish gap with respect to other indices may represent an additional brake in the coming months in the face of 2024 that investment firms face with special doses of caution. The markets' first projections for next year lower the usual forecasts of returns close to double digits. The forcefulness of the early Christmas rally has eaten up a good part of the profits expected for the next year.
The resilience of the economy, once again under the threat of recession, will once again be key in the evolution of the Stock Market during the beginning of 2024 that will feature, barring a major surprise, major upheavals in the form of future rate cuts of interest by central banks.