It’s been a decade and a half since the collapse of Lehman Brothers shocked the world when misconduct with subprime mortgages (also known as junk or subprime) at what was then the fourth-largest investment bank in the United States was exposed. It ended in a global financial crisis that hit the markets with unprecedented severity. Since then, industries such as finance have seen significant changes, with some companies subject to greater regulation to prevent a similar scenario from happening again.
Now, 15 years later, the context and problems are different. After a health crisis unprecedented in this century, war broke out in the West, fueling inflation that had already started showing signs of outbreaks months earlier. It did not take long for interest rates to be raised by the various central banks to curb the rise in prices, and there have already been eleven increases in the United States and ten in the Old Continent – the latest of a further 25 basis points. , the European Central Bank announced this Thursday.
With this in mind, stock markets in both regions have had a tough time in recent years, but if there is one sector that stands out as a clear winner across the pond, it is technology. This can be seen in the prices of technology companies in the S&P 500, which have risen by almost 700% (through the median of stocks in this sector) since September 15, 2008 – the day the big breakout began. Financial crisis – to date, which represents the strongest appreciation compared to the other segments of the index.
More expensive multiples – due to the greater growth that these companies experience and offer due to the nature of their business – have not made these companies less attractive, and this dynamic has been with greater force in recent months thanks to artificial intelligence designed like that The promised land of this industry has appeared again.
This is also reflected in the Nasdaq, the technology index par excellence, which takes the lead in annual gains with a rise of 30% in 2023, after suffering a setback of 32.9% last year. This index is also the leader based on the September 2008 crash (see chart), with an increase that has since reached 800%.
If you group the various companies in the S&P 500 by sector, all have gained more than 100% since September 15 of last year, with the exception of the energy sector – another major player this year – which is up around 90% over that period . Companies like Valero Energy, Pioneer and Oneok are the ones that have accumulated the most gains since then, with increases of 400%, 380% and 290%.
“The Lehman crisis seemed like the end of the world at the time, the markets suffered a lot. What has increased disproportionately since then, in my opinion, is the regulation and interventionism of governments and central banks in the economy, and not for them. Better because both groups with their expansionary monetary and fiscal policies were the cause of the recent bubbles, says Juan José Fernández Figares, Director of IIC Management at Link Securities.
In this sense, the expert believes that the main problem of the Spanish stock market in recent years has been the banking sector, since the Ibex is the only index that has not yet managed to reach pre-Lehman levels. “The biggest constraint on his (Capricorn’s) behavior has been the banking sector, which maintains a very high relative weight in the selective sector, a sector that has destroyed value, as has been the case, over the last 15 years of extremely low interest rates.” “This is reflected in his stock market behavior and his valuations,” adds the expert.
The strength of the bank
The industry, which was the protagonist in September 2008, has come to the fore again in the last year. Tighter conditions haven’t stopped the largest North American banks by capitalization – those included in the S&P 500 – from rising 167% since then. And despite the outbreak of a banking crisis that prevailed last March on both sides of the Atlantic following the collapses of SVB and Credit Suisse – and those that followed – the securities of financial institutions are enjoying increasing popularity thanks to the different situation interest rate increases and what impact this measure has an impact on its margins.
Although the market is already expecting increases in the price of money by the US Federal Reserve to stop, increases at American banks continue to increase as the key interest rate (5.5% in the US) is expected to rise by July 2024.
