The year 2024 closed with spectacular behavior for the bags. And he did almost in spite of everything, and all, covered in several things, more than those that come to mind in a fast analysis. Undoubtedly, euphoria around technological and everything that has to do with artificial intelligence is a essential factor of these marketsmainly in the US, but collected in second derived by the rest of the bags. Another factor is the fact that the fundamentals are really good. This is reflected in each quarter of presentation of results, which Expectations are comfortably improving of analysts. And also fundamentally in the US.
Another factor is that of the good evolution of the economies, which is reflected in the macro data, also fundamentally in the US, where the debate to avoid recession and soft landing, which is hot for Europe now, was already outdated for that economy for that economy , from which a growth level well above 2% For this year, around double what Europe will grow.
Among the data stands out inflation, which has been correcting down for a long time, and that also liked the bags. And, in addition, something else stagnates in recent observations. And this, in part, is one of the factors that has led to another of the leading movements of recent times, that of the important Readjustment of types of typeswhich made much less cuts from anticipated some time ago. And, again, it must be said that this has been so, fundamentally, for the US. In this economy, after the last labor report for January, with fewer jobs created, but with an important revision of the December data, and with a salary rise and reduction of the unemployment rate, perhaps it will be deepened again in the Less need to cut types by the Fed.
In this sense, Trump appears as a ‘great event’ that is not easily interpretable or predictable, because it can be rightly erratically or erroneously successful, but markets cannot ignore all that, because it ends up having consequences, and many. Trump’s own figure already generates attempts to predict what will cause in the markets. It is one option that, without a doubt, a priori, is pro-market: a convinced of the lower regulation in the different areas, also of the necessary containment of taxes or the elimination of obstacles, that some of them can be, to their understanding in favor of the economy, American, of course, find The least possible obstacles to advance.
And this is already reflected by the markets with the entire Impetu of Bags since November and all the support that they have also had based on this factor in stages of less joy.
But, on the other hand, Trump also brings other types of foreseeable actions that do not favor the best march of the markets, an evolution that does not depend only on wanting to be, but to do because it is. The new president, even if he repeats with another administration between both legislatures, on the one hand, advocates because the Fed lowers types, and does not seem to stop putting that pressure on Powell. And, on the other hand, it also advocates some policies that the market can expect them to be inflationary. The commented tariffs, of which we have spent months speaking and of which we have an unpredictable time to continue doing so, have been used by Trump “only” as threatening. In some cases, with promises of temporary application start, which has missed by postponing later based on some agreements and promises that come very well as internal propaganda. One and another, after all, they expect opposite movements in the Profitables of American bonds. Sometimes there are effects that are compensated and prices stability does not always come because many things do not happen, but because opposite things happen.
And what do the bags have to do, or the types or credit market in view of all this? Well, I believe that the short -term, instantaneous conjunctural analysis of the effects, separates us from a reality already confusing. We have seen how some of the last Monday They have not become “Black Monday”but they have caused important punishments that finally did not spread over time, they did not create a trend, they did not precede a “before and after.” These episodes, the first of them after Depseek and the second after the ads of Rates to Canada, Mexico and Chinathey caused reactions that are their own markets that do not lack uncertainties, but those who do not want to liquidity. In another case, such corrections lived in those days could have extended in time without remedy, as has happened so many times.
So yes. The markets still want, the bags continue to ask if they are faces, fundamentally, again, in the US, but they find reasons to continue trusting (S&P 500 is at historical maximums and carries a +3.2% in the year), with a Technological sector that was the worst in January, but that does not accumulate important corrections.
Meanwhile, in Europe, the bags do better, they also receive rotation flows from the US for investors that can begin to see little travel in those bags. And the guys have calmed their upward path, something that also receives the bags, with expectations of additional cuts much more contained, we already know where fundamentally, and with those of the ECB that are maintained, between 3 and 4 cuts are expected in 2025. This factor, in fact, is one of those who holds the credit market wellprivate fixed income, together with that of the great existing liquidity and the good fundamental. The activity of the emission market in what we have been demonstrating and the secondary market behavior of these references of bonds issued, too.
Finishing thus, with Europe, you can only highlight the important challenges it faces: elections in Germany, important fiscal challenges (France, Germany …), activity of activity and growth that corroborates that the recession is avoided, effects of the effects of the Commercial policies from the US, etc. But, for now, Europe has been doing well and that has not always been the case in recent times. Better to be prepared for those challenges in better position, because Volatility is coming, uncertainty conversion comes in realityworse or better, curves come.
#Europe #waiting #Trump #Curves
