The Ibex returns to falls amid tensions between China and the US

The European stock markets, including the Ibex, return to the falls this Tuesday (Ibex:: -1.2%) after the increases of the last session in the Old Continent and after a day of falls in the USA, that Asia has continued this morning. Wall Street ended up turning around the declines in the big tech companies. The Nasdaq dropped 2%. All this, despite initial optimism about the advances in vaccines against Covid-19.

In addition, on Tuesday the tensions between China and the US weigh negatively. The White House decision to reject almost all Chinese maritime claims in the South China Sea has increased investor nervousness. It seems that the two largest economies in the world are facing everything from the pandemic to human rights in their trade conflict.

On the other hand, China today has published data that was better than expected. Imports rose 2.7% while economists expected a 10% drop. The May reading was -16.7%. Exports reached 0.5%, and the consensus estimate was -1.5%, while the May reading was -3.3%. "The rebound in imports and exports points to a change in the world economy. It is possible that the positive reading of exports is largely due to demand from the western government for personal protective equipment," explains David Madden, analyst at CMC Markets in London.

Today begins the second quarter earnings season in the US. JP Morgan, Wells Fargo and Citigroup announce their figures. Experts say dividends will be the focus of these bank accounts after the Federal Reserve (Fed) said - after conducting its stress tests - that they should be limited to current levels.

Otherwise, investors remain expectant before the meeting of the European Central Bank (ECB) on Thursday. The Fed meets on July 28 and 29. Robert Kaplan, chairman of the Dallas Fed, issued a statement yesterday expressing concern regarding the infection rate, saying the Federal Reserve may have to do more if help is needed.

Finally, in the macro data chapter, the German CPI for June rose 0.9% compared to the expected 0.9% and 0.6% previously. UK GDP rose 1.8% on a monthly basis in May from -5.5% expected and -20.4% previously. The CPI for Spain in June rose 0.5% compared to the previous month and raised its year-on-year rate by six tenths, down to -0.3%, compared to -0.9% in May. The July ZEW in Germany and the June CPI in the US are also published today.