The poor performance of the Workout Template manufacturing sector is due to the deterioration in demand, since orders received in March registered the largest drop since the end of 2012, while orders for exports experienced the largest decline since August 2012. In this way, as a consequence of the deterioration of production and new orders, there have been signs of contagion to the labor market, since, despite the increase in the workforce registered in March, this was marginal and losses of manufacturing jobs in Germany and Italy. Likewise, factories in the euro zone have shown their preference in March to make use of their inventories, which translated into a fall in their purchasing activity, which fell to the minimum levels of the last six years. “Looking at future indicators, the risks have intensified and the trend could worsen in the second quarter,” Williamson warned. The elections make the Ibex tremble. Not so much for the new government that comes out of the polls, but for the possibility that Spain is ungovernable after the elections. A political blockade that could cost the Spanish stock market a fall close to 9%. As it happened in 2015.
This is reflected by XTB in its report “The Impact on the Stock Exchange of the General Elections of 2019”, published this Monday. In it, the specialists of the “broker” have outlined three possible scenarios after the elections on April 28: a government of the left-wing bloc led by the PSOE, an executive led by the PP with the support of Citizens and Vox (“that it would have a marked liberal character “) and the one that has been labeled as” the worst scenario of all: the institutional blockade “. In addition, the report highlights the negative impact on the Exchange of any type of electoral hangover. On average, the Ibex falls 2.69% in the session following the general elections; If there is also a political overturn in the elections, the average decrease is 4.28%.
Of course, the fall will not be widespread. The result of the ballot boxes will boost certain sectors and weigh down others. According to the report of Workout Template, a socialist victory would harm the banks and the oil companies, victims of the fiscal policy that Sánchez wants to develop. On the other hand, pharmaceuticals, due to the elimination of the co-payment and the consequent increase in demand, and construction companies, due to the increase in investment in infrastructures, would be the most benefited. In the event that there is a change of Government and it is the PP who happens to lead the Executive, banks and technology companies would get rid of the tax hikes, which according to XTB would boost their quotation. In contrast, the party’s commitment to energy liberalization and its reluctance with renewables would condition the outcome of these sectors. The Popular Party, in fact, is the only one that would boost the price of the bank, according to XTB. We can (debt restructuring), Citizens (control to the SICAV) and Vox (promotion of public pension plans) could also harm the financial sector, which has more weight within the Ibex 35.