Investors begin to be tired of such bad news and exploit any escapade to leave sales aside. The agreement between conservatives, social democrats and green in Germany to activate the package of combined stimuliThe possibility that the United States avoid the closure of the administration and the hopes of reaching peace in Eastern Europe act as a counterpoint to the increase in commercial tensions. The Ibex 35 clings to 13,000 points and increases by 1.43% on Friday, the profits that make up, but cannot cancel the weekly losses. Over the past five days, a period that has been marked by the tariff crossing and the bad taste that left the results of Inditex, the Spanish stock market dates back to 1.9%. The textile group is left 11%, its worst week in five years, coinciding with the beginning of the great confinement.
Friday optimism means that the risks have disappeared. In the last few days the market has participated in a constant change of direction in commercial issues confirming that the tariff war has done nothing but start. After the entry into force of aluminum and steel taxes, Canada and the EU showed that they will not maintain the weapons crossed and responded to envy with rates on US products worth 45,000 million euros. Trump has shown his belligerent again and Has announced that it will impose a 200% rate for European wine and spirits. The tariff crossing has acted for the patience of investors and threatens to deteriorate an American economy that begins to give the first signals of deceleration. The recession drums return to the front line while protectionist policies are seen as a clear inflationary risk.
The behavior of IBEX 35 followed the wake of the rest of the European indexes. Only 24 hours after the markets had to digest the possibility that the peace negotiations between Ukraine and Russia were in dead points, the President of the United States ensured that the conversations held with their Russian counterpart had been very productive. The Republican believes that there are still the possibility that the war will end soon. The hopes of peace and millionaire investments that would help to revitalize the German economy anemic have translated into profits of 1.86% for the DAX, an index that must be canceled the weekly losses (-0.1%). The rest of the bags did not want to lose the party and opted for the climbs. The French CAC adds 1.13% Friday; The British Ftse, 1%; Spoxx 50 euros, 1.42% and Italian Mib, 1.73%. The profits do not obey a simple rebound, but are accompanied by the entry of money. According to Bank of America’s data, the entry of money into variable income funds recorded the highest volume in eight years and therefore adds five consecutive ascent weeks.
The European variable income earnings on Friday were supported by the Wall Street increases. The day after the S&P 500 entered the technical correction, the market reference index shakes the cobwebs and increased by 2.13%, which closes its best session from the elections last November. Despite this solidity, the S&P 500 renounces 2.27% in the last five days and five -week chains in negative, but its series from May 2022, a period marked by the strong types of types and by the correction of the Faang, at that time the engine of the markets. The superiors were the promotions of Nasdaq, which were recorded 2.61% Friday, while Dow Jones increased by 1.65%. Investors are struggling to find the right value in a context in which rates, inflationary tensions and the weakening of the economy are the great winds.
Analysts don’t stop agreeing. While some consider that the falls of the beginning of the year are a simple correction, Others believe that it has still precipitated to exploit cuts to increase appetite for risk. “The context of uncertainty continues and will continue to dominate and dance risk activities”, underline Macroyield analysts. The company’s experts remember that the aggression shown by the Republican is considerably higher than that detained in the first term. “Economic uncertainty has increased extraordinarily, approaching the maximum area at the beginning of the pandemic and promotes the deterioration of variable income,” they underline. After the S&P 500 entered the correction area on Thursday (10% dropped from its latest maximum), the next point to be monitored is the possibility that the falls extend and drag the index on a bearish market. That is, which decreases by 20% from the maximums recorded in February.
Nothing can be discarded. The coasts and events of the Trump Administration have made the forecasts managed by the analysis companies obsolete by 2025. Waiting to see how the events evolve and their impact on the economy, investors cling to the possibility that the United States avoid a government closure after the democratic leader in the Senate by withdrawing his threat to block the six -month funding project. “As in previous occasions, we hope that an agreement will be reached given the risk of not doing it,” says rents analysts 4. However, this will not be enough to return the tranquility to the market. “It could only be a temporary respite and there is probably also a contagion effect in Europe,” says Sophie Alternat, economist by Julius Baer.
Short and medium term expectations are not very confident. After a slightly full of hope battery that aimed at a moderation of price, on Friday it was known that the trust of the US consumer decreased to 59.7 points in March, his lowest reading from November 2022 and the third consecutive monthly cut. While consumer trust deteriorates long -term inflation expectations increase to 3.9%, their highest level since 1993.
With these data on the table, Chris Iggo, that is, for Axa Investment Manager, is skeptical and believes that the markets have underestimated the disturbing nature of the Trump administration. “One thing is sure: the political risk will not disappear and the political risk means volatility in the markets,” he observes. The expert emphasizes that as the economic activity weakens, it is more difficult to evaluate the cash and cash flows of the companies, “the growth prospects of the United States are questioned. It costs me a bit to see the prospects of variable income. It has less safe growth: it is an illusion to bet that the political risk disappears and the previous rally continues. Trump will not cease to be a source of uncertainty and, if the political risk follows, the volatility in the markets will follow, “he underlines. Iggo adds to the rumors that advise prudence and believes that the most probable scenario remains the aversion to the risk pending greater clarity on the geopolitical events that are marking the wrist of the markets.
While the variable income experiences strong oscillations, the debt market seems much more stable. Waiting to see Federal Reserve’s decision And the updating of the macroeconomic projections, the American bonus of the United States is maintained at 4.3% with the two -year reference at the edge of 4%. “The ties offer a certain protection if difficult policies make the American economy slowed down more and before the previously estimated estimate, which in turn would probably lead Fed to cut the types faster”, underline Pimco analysts.
The agreement reached by conservatives, social democrats and green allows the future German chancellor, Friedrich Merz, to advance the tax plan which includes the mobilization of 500,000 million to promote investments in infrastructure and defense. After Tuesday’s vote in Parliament, the plan will pass through the Chamber of the Regions (Bundesrat). Merz manages to save the first firefighting test before the new parliament is formed.
The stimuli are seen as an incentive to fold the economy but will require a significant increase in debt emissions. With less intensity than the previous week, the yields of the 10 -year German bonus increase slightly to 2.87%. In just two weeks, profitability has climbed 50 basic points. The promotions have their reply in the rest of the references of the euro area. The most surprising case has been from the French debt for 30 years which is maximum of 2011.
While the performance increases the expectations of an improvement in growth allows the euro to move away from equality that has reached February and are already higher than $ 1.08. Bank of America analysts point out that the appetite for the community currency is at the same level as August 2020, after the announcement the next generation funds.
Scholarship – Foreign currency – Debt – Interest rates – Raw materials
