Ómicron opens a 5% drop that gives the stock market more travel in 2022

The penultimate week of the year started with falls in the stock markets, mainly for two reasons: the high incidence of the omicron variant of the Sars-Cov-2 coronavirus throughout the world and the weakness shown by China when the country's central bank decided to lower the interest rates to sustain economic growth.

Instead, the rebound stars in the session this Tuesday, with increases in the European stock markets of around 1%. However, with infections on the rise, an unprecedented supply crisis and energy prices spiraling out of control, the year-end markets are marked by volatility. The main indices are immersed in it and they are deciding how the start of 2022 will be.

Joan Cabrero, advisor to Ecotrader -elEconomista's investment portal-, points out two scenarios: one of continuity of the bullish reconstruction that will lead the S&P 500 or the EuroStoxx 50 to record new highs in the coming weeks, and another more lateral.

The difference between one and the other will lie in whether or not the supports that the reference selective in Europe and Wall Street approached this Monday, levels that coincide with the minimums of October, and which is a buying zone for the investors. These supports appear at 3,900 points for the EuroStoxx 50, at 4,480/4,500 integers for the S&P 500 and at 14,800 for the German Dax.

The EuroStoxx stayed this Monday at 5% of its support level , after falling 1.3% compared to Friday and leaving the accumulated gains this year at 15.6%. The Dax, which lost 3% at the worst moment of the session, ended the day with a fall of 1.88% and reduced its annual stock market return to 11%. This is its largest daily decline since the one recorded on November 26.

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In the case of the Ibex 35, which in recent weeks has completely dropped from the rest of Europe and struggles not to enter losses in 2021, "the most striking thing and that continues to invite us not to rule out an upward counterattack is to see how it continues to resist on the support zone of 8,000/8,150 points and, in fact, in the first hour of business the fall was stopped after the Spanish selective reached the level where it closed the year 2020, at 8,078 points", explains Cabrero.

"From there it bounced and this leaves the swords at the top: the transfer of this level together with the psychological support of the 8,000 integers, would open the door to a probable fall to 7,700 points", continues the technical analyst.

The Ibex fell 0.83% on the last day, to 8,242.40 points, and shows a positive balance for the year of only 2.09%. To touch its annual maximum again, the index would have to rise almost 13% on the floor; a figure that goes to 22.3% if it is the maximum prior to the pandemic of 10,083.60 units. In Monday's session, only six stocks remained positive: Laboratorios Rovi, Acciona, CIE Automotive, Solaria, Red Eléctrica and Acerinox.

upside potential

From the level of 3,900 points, the EuroStoxx would have a potential of 12.86% until its last ceiling, in which the great rally caused by the announcement of the Pfizer vaccine in early November 2020 culminated. From similar levels and up to the same target, the Dax would move 9.8% and the S&P 500 5.18%.

On the first day of the week he also quoted the setback in Joe Biden's economic agenda. The US president will not be able to approve the latest projected stimuli until 2022. And in turn, the fear indices, such as the Vix of the Chicago Stock Exchange (linked to the behavior of the S&P 500) or the VStoxx (which measures the implicit volatility of the EuroStoxx 50), approached the maximum of recent months, the 30 points at the beginning of December, both remaining close to 25 integers.

Likewise, the uncertainty extended to oil due to the mobility restrictions that different countries are applying to contain the latest wave of the coronavirus pandemic. The price of futures that trade on the reference crude in Europe, Brent, fell around 5.3% in the middle of the session and stood in the area of ​​70.2 dollars per barrel. So far this year, the European reference is still revalued above 34%.

On the contrary, natural gas rose again, putting pressure on the price of electricity and inflation in general, which is expected to register another record in December both in the US and in the Old Continent.