May 23 – Main Spanish stock indexes opened lower on Tuesday, collecting four consecutive sessions of gains ahead of a series of macroeconomic data in Europe and the United States, while debt default outlook from the United States loomed .
The country’s President, Joe Biden, and the Speaker of the House of Representatives, Republican Kevin McCarthy, have been unable to reach an agreement on the US debt ceiling, 10 days after a default situation arose with potentially devastating consequences for the global economy.
Yet both figures promised to continue talks over a possible agreement, sending an optimistic message to markets with caution and a low appetite for risk.
Also a delayed rate cut by the Federal Reserve was likely, bolstered by messages from its many monetary leaders torn between pause or more rate hikes in June.
The FedWatch tool currently projects a quarter percentage point increase in funding costs in June and a 20% chance of delaying the cut to November or December.
On the macro side, Purchasing Managers’ Index (PMI) for the Eurozone and the United States will be published during the day, which will serve to examine the state of the size of the economy.
“We expect to continue to see a contracting manufacturing sector (below 50), while the services sector will remain in expansion territory (above 50), although slowing compared to last month, which together contribute to the overall PMI. Should cause a decline,” Renta4 analysts wrote.
Initial claims for personal consumption spending and unemployment benefits in the US will also be released along with the minutes of the Fed’s latest Federal Open Market Committee meeting, which could provide valuable clues on future central bank decisions in June.
In this context, at 07:05 GMT on Tuesday, the Spanish stock market Ibex-35 fell 30.50 points, or 0.33%, to 9,274.50, while the FTSE EuroFirst 300 index of broad European shares fell 0.36%.
After boosting the rise of the Ibex-35 on Monday, the banking sector booked profits early in the session on Tuesday: Santander lost 0.56%, BBVA fell 0.34%, Caixabank fell 0.17%, Sabadell fell 0.02%, Bankinter Fell 0.29% and the lone rising bank stock Unicaja Banco rose 0.16%.
In broad non-financials, Telefonica shed 0.56%, Inditex 0.41%, Iberdrola 0.26%, Selnex 0.23% and oil company Repsol 0.41%.