Ibex 35 hits 20,000: Real success or liquidity bubble?

Ibex 35: The 20,000-point mark exposes the rift between euphoria and bubble warnings
The Spanish Ibex 35 index has reached 20,000 points, a level that seemed like nostalgia from past years. This surge hides a stark fact: the benchmark has advanced more than 100% in two years, meaning an initial €10,000 investment has doubled, excluding dividends. The uncomfortable question is whether this reflects genuine Spanish economic success or a mirage manufactured by liquidity. As one skeptical voice graphically summarizes: money is neither created nor destroyed, yet markets seem to have learned how to multiply it.

Doubling in two years: Banking as the engine
Behind this milestone are the banks. They represent nearly 35% of the index, and their margins continue to grow: they charge some of Europe's highest management fees, offer minimal interest on deposits, and enjoy limited competition. Much of the rebound is explained by these entities, which also distribute generous dividends. Critics see the true business model here: profitability via commissions rather than productive credit. Some even add that the Spanish financial sector is among the most profitable globally in this phase, acting as bait for global asset managers like BlackRock to include the Ibex in their key positions.

The money printer versus productive companies
Here, interpretations diverge. For one school of thought, the Ibex performs well because its constituent companies operate effectively, leveraging international exposure to sell despite low domestic growth. For the opposing view, the driver is money emission: central banks and debt purchases have flooded markets with liquidity, inflating stocks, real estate, and metals alike. The explanation boils down to one word repeated ad nauseam: the printer. If money is printed without real wealth growing, it is not companies rising, but asset prices.

Highs and periphery: Who is left out?
Stock market euphoria coexists with uncomfortable data. While the benchmark celebrates, the majority sees inflation eroding purchasing power and savings failing to last until month-end. The generational gap is brutal: those under 40 barely have a €5,000 cushion, and inheritances do not suffice to buy housing. Thus, the Ibex rally has a very specific beneficiary: those who already had invested assets. Small savers, arriving late without financial literacy, risk buying at the peak just when everyone tells them stocks cannot fall.

Comparing with Germany and the US to keep perspective
A curiosity: since its inception in 1992, the total return Ibex 35 has outperformed the German DAX. However, just over a year ago, both indices were tied after 32 years of history, explaining why part of the buzz was simply overtaking Germany. Compared to the S&P 500, the picture is less flattering: the Spanish benchmark took 18 years to beat its highs, while the US index frequently surpasses them. Adding dividends, the difference remains enormous. Let each draw their own conclusions.

With 20,000 points, the official narrative can claim victory. But analysis stalls on the question no one fully answers: if wealth is created on the balance sheets of companies selling abroad and printed money flows into assets, how much of this rise corresponds to the real economy on the street? Until someone knows how much liquidity is needed to sustain this castle, skepticism has reason to remain. Or worse: to be right.