The stock market has taken off ahead of the reopening of the US government, which is leading to one of the best winning streaks of the year for the Spanish market. The Ibex managed to break a new high by exceeding 16,600 points for the first time and advancing by 1.4%. The increase in just three days stands at 4.5%, as the US Senate cleared the way for an end to the federal shutdown over the weekend and restored investors’ risk appetite.
Investor sentiment improves for US tech stocks and helps European indexes sustain gains. The German Dax and the Euro Stoxx 50 rose about 1%, while the Paris Cac gained 1.1%. And this despite doubts hovering on Wall Street, with the S&P 500 losing 0.2% and the Nasdaq 0.4%, while the Dow Jones managed to exceed 400 points for the first time thanks to the progress of the financial sector.
“Once the normal functioning of the North American administration is restored, attention will be paid to the publication of the numerous macro references that have not been known in the last month and which will be relevant for the decision-making process of the Federal Reserve (Fed), while the market will pay particular attention to the official employment data for September and October,” explains Renta 4.
Citi experts are confident that “statistical agencies will provide guidance on release dates for delayed data reports in the coming days.” In his view, September employment data was almost ready to be released before the shutdown and could have been released on Friday, although “it is more likely to be released on Monday or Tuesday”. While they estimate that we will have to wait until early December to know the October data and believe that “it will be helpful” for the Fed’s December 10 Open Market Committee to know the November data, however, they comment “it is unclear whether they will be released as scheduled or whether they will be delayed.”
The banking sector serves as a catalyst for the Spanish stock market, where the Ibex banking sector has grown by more than 7% in the last three days. This Wednesday Santander, CaixaBank and Unicaja recorded increases of more than 2.4%, while Bankinter, BBVA and Sabadell gained more than 1.6%. Next to them is Solaria, which rises above 3.7% and leads the advance of the selective, followed by Grifols (3%). On the other hand, only five stocks opt for the downtrend: Repsol, Indra, Fluidra, Telefónica and Enagás.
On the foreign exchange market, the euro is trading stable at 1.1577 dollars. Brent oil, Europe’s benchmark, fell 0.34% to $64.94 a barrel on worries about oversupply. In the debt market, the profitability of 10-year bonds increases in Europe and the United States.
“What I see is an air of optimism and momentum in the U.S.,” Roland Kaloyan, head of European equity strategy at Société Générale, told Bloomberg. “Markets are buying options for 2026 thanks to a positive combination of strong growth, investment in artificial intelligence, Federal Reserve cuts and a weaker dollar.”
The resolution of the Administration’s last four partial shutdowns in the United States has boosted the S&P 500 and most of its sectors, according to average profitability compiled by Bloomberg. Stocks have risen after every partial close since 1995 except early 2018, with consumer stocks leading the way. Given this week’s 1.8% advance, with signs of agreement, markets may have already priced in some of the usual post-close rallies.
“With the government shutdown and the delay in the release of key economic data, the real challenge is not the short-term drag on growth, but the increasing difficulty for investors and the Federal Reserve in assessing the economic outlook,” says Seema Shah of manager Principal Asset Management. “However, as data releases resume, the possibility of a rate cut by the Federal Reserve in December should re-emerge, reinforcing a risk-friendly environment.”
The better economic prospects support the banking sector, which today shows increases of 2.3% for Santander and CaixaBank. Cellnex also contributes to the increases, recording an increase of 2%, even if the value that advances the most within the index is Solaria. The good tone of the market means that, on the other side of the scale, no value drops more than 1%, and only Indra drops more than half a point.
“There was always a risk that if the shutdown was prolonged, growth would suffer and therefore the data would be difficult to interpret,” Michael Metcalfe, head of macroeconomic strategy at State Street, told Reuters. “The fact that we have finally managed to overcome the lockdown is therefore a relief, because this is not expected to significantly slow down growth,” he adds.
The United States House of Representatives is preparing to vote on the key bill this Wednesday that will put an end to the longest shutdown in the country’s history, after six weeks of paralysis and clashes between Republicans and Democrats. The gridlock resulting from the political clash has left more than a million federal employees without pay, affected food assistance programs and caused thousands of airline cancellations and delays.
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