Hard hit for the Ibex after the EU recommendation and the Merck vaccine fiasco

Strong falls in the Ibex and the rest of the stocks of the Old Continent. The European stock markets have increased the red numbers after the pharmaceutical Merck announced that it has interrupted the trial of its vaccine against Covid after obtaining poor results. The Ibex 35 has fallen by 1.73%, to 7,897 points, and has received a harsh punishment after also learning about the recommendation of the European Union, which has advised isolating the territories with a cumulative incidence of more than 500 positives per 100,000 inhabitants, something that currently affects most of the Spanish territory.

Within the Spanish selective, the very strong decreases in the tourism sector (IAG, Meliá, Aena, Amadeus) have stood out. The new US president, Joe Biden, plans to reestablish Covid restrictions on travel from the United Kingdom and Europe, as it became known this Monday, and that is penalizing these titles.

In addition, concern persists about the economic recovery that last week led European stocks to register sharp falls. The fear of the possibility that 2021 will be a new year lost economically due to the records of deaths and infections that are registered by Covid-19 is there.

"While US markets continued to set new records last week, European markets were more lackluster as optimism in the first week of 2021 has given way to much more caution in the face of increased short-term economic pessimism." , explain the experts at CMC Markets.

"These concerns, coupled with the prospect that EU leaders could consider closing internal borders due to rising infection and death rates, have made investors in Europe much more cautious, especially considering that the countries of the Old Continent have been much slower in coordinating a rapid implementation of the vaccine ", they add.

This week there will be an avalanche of results in Spain, with the accounts of Bankia, BBVA, CaixaBank or Siemens Gamesa, among others. Siemens Gamesa made a preview of these figures yesterday Sunday and today has led the gains in the Ibex. Outside our borders, Tesla, Microsoft, Apple and Facebook will publish results.

In addition, the Davos telematics forum is held. It remains to be seen what the great world leaders have to say about the risk that the economic recovery is truncated this year given the current circumstances. Today the president of the ECB speaks at this meeting, Christine Lagarde, who last week stated that the virus poses "serious risks" for the economy. It should be remembered that this Forum is only an appetizer of the Davos Forum that is held in Singapore in May, which will be face-to-face. On a macro level, the German IFO for January has been published.

On the other hand, it should be remembered that this week's calendar also includes the Federal Reserve (Fed) interest rate meeting on Wednesday.

Finally, as for the technical aspect of the Ibex, it could extend the falls to the level of 7,663 points, warn the experts of Bolsamanía. The first resistance level is at 8,173 points. We will not see a sign of strength as long as it remains trading below this price level, they note.