The Ibex (-0.2%) starts the week weak and falls to 9,800 points

The European stocks have registered average losses of 0.5% and have pulled the Ibex 35 (-0-26% 9,806.2 points). In a session that doesn’t count with a reference from Wall Street, closed due to the celebration of the ‘Day of the President’ after last Friday it finished flat, with moderate earnings. Meanwhile, Asia has risen this morning, although the markets there are “limping” due to the fact that many of the firms are closed for the celebration of the Chinese New Year.

Europe has lived a session of transition from a recovery week after the crash at the start of the month that scared investors. In the case of the Ibex this week it has an incentive and it’s that Telefónica will present its results, numbers that will be put under the microscope in a moment when the operator is going through a rough patch on the stock (today -0.34% down to 7.61 euros).

Also this Monday there were more results being published. In Spain, Red Eléctrica has informed that their net profit improved a 5.2% in 2017, up to 669.8 million euros. The company has also informed of its intention to propose the board of shareholders of a distribution of a complementary dividend of 0.6639 euros per share. The payment will be made on July 2 of 2017. Nevertheless its stocks have fallen 0.65% and have confirmed the bad stock moment the electric sector is going through.

Aside from Telefónica and Red Eléctrica, Cellnex Telecom (-1.65%) and Ferrovial (-1.45%) have led the sales with Meliá Hotels (-1.43%), DIA (-1.08%) y Aena (-0.93%). Gas Natural Fenosa (-0.9%), Endesa (-0.8%), Iberdrola (-0.3%), Inditex (-0.3%), Santander (-0.2%) and BBVA (-0.2%) also list in red.

On the other hand Acerinox rises a 5.7% and leads the rises favoured by the commercial tensions and the steel war that the US and China have started to battle over tariffs and Chinese imports that the Trump administration wants to regulate.

Tecnicas Reunidas is another of the few values in green today after confirming a contract with the Middle East of 2.7bn dollars. The airline AEG (+1.7%) and Caixabank (+1.6%) are the other two profitable firms of the day.

In the currency markets the euro falls a 0.12% down to 1.2394 dollars. The European currency reached is annual high since 2014 in 1.2557 dollars in January. This zone is also the resistance in price that the it presents in the higher part of the falling channel on the long term.

As for commodities, the Brent petroleum rises 1% up to 65,54 dollars and is getting closer to their annual high over 71 dollars, market also in january 25. On the other hand, gold falls to 0.4% down to 1.350dollars.

LUIS DE GUINDOS VICE PRESIDENT OF THE ECB

As for everything else, the week starts with Luis de Guindos, minister for Economy and Competitivity, as the main character on the political/economical front. Guindos has won the role of vice president of the ECB after the Irish Philip Lane retired from the run.

After this, one of the main questions is who will take his place as minister for Economy. According to political circles, if Rajoy decides to name a high profile minister it means he is trusting in elongating his administration. If the successor has a low profile, the president doesn’t trust in the current administration cicle.

As for the macro calendar today, there were little references. As for the week ahead, one of the most important events will be the publishing of the records of the Fed’s last meeting on Wednesday. “It will be interesting to check how divided is the committee regarding what they’re doing with the rate increase process”, point out the Link Securities analysts in their daily report.

TECHNICAL ANALYSIS

“We start the week with a bitter session, not because of the falls but because we have managed to mark a high of 9,905 points during the session. That is the resistance level that we have referenced in many occasions in the past few weeks. The 9,900 were once a support but now they are a resistance”, explains José María Rodríguez, technical analyst in Bolsamanía.

“Or what is the same thing, we cannot dismiss that we are before a pull back to the first resistance to attack the support of the 9,580 - 9,600 points. As we have been saying, the logical move is to bet on the year lows in most stocks and regarding the February 9 lows as a support or breaking through them that could mean the next tendency move”, adds the expert.

“Said with other words”, says Rodríguez, “any chance that the index restructures on the rise on a mid term means it will have to respect the monthly lows”.