Macroeconomic environment of the stock market

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Para que puedas desarrollar cualquier tipo de strategy de inversión con un entorno macroeconómico distinto al de la Bolsa, te vamos a ofrecer algunas de las most important keys that you should contribute from now on. So that you can carry out operations on the stock market with greater security and especially, protecting yourself from possible interference in the equity markets. Of course, it will not be very complicated to do and it can offer you many joys in the coming days. Beyond other considerations of a technical nature and perhaps also from the point of view of its fundamental principles.

Economic environment: interest rates

It will undoubtedly be one of the factors that will determine the direction of the Stock Market in the coming years. Faced with the decision of the monetary authorities, one way or another. Even when they will open the tap on the price of money or if, on the contrary, everything will continue as before. In other words, with the cheaper price of money and how much it has helped the stock indices of the old continent have risen with great intensity in the last five years. A good part of the small and medium investors will be aware of this decision that will affect their interests in their relations with the world of money.

While on the other hand, it cannot be forgotten that we are facing a macroeconomic environment of the Stock Market that is being affected by a slowdown in international economies. And this is surely not good news for investors, much less for companies listed on the stock markets. Due to the fact that in a macroeconomic environment of a changing stock market, you will have no choice but to vary your investment portfolio to position it with the new times that we will have to live from now on.

Brake on the economy

Another aspect that will have to be elucidated in the coming months is to what extent the economy is going to slow down. The direction of equity markets, one way or another. And you must be ready to face this new situation that can undoubtedly arise at any time. With a change in the investment strategy that you should take in the coming weeks. In a changing world as it also happens with the Stock Market and that can make you lose a lot of money or, on the contrary, earn it.

To this end, the common denominator of your actions or there is no doubt that it will be common sense and caution to execute any type of investment strategy. Because there is no doubt that what you are playing is your own money and this should make you think about the stocks you should import from now on. It is not surprising that the fact that there may be a business cycle change anytime. With all that this turn has in the macroeconomic environment of the Stock Market. Beyond another series of considerations that you must also assess now.

Overheating in the bags

This is definitely an aspect that should be taken to take positions in the stock market. Because there is no question that equity markets have rallied a lot in recent months, with stocks have appreciated about 50%. And to this end, there are many voices that warn that the corrections are very close and in them we can leave many euros along the way. We must not forget this aspect if we do not wish to have other surprises in the coming months. Although it is true that many securities have lagged behind in recent years, and especially those belonging to the banking sector.

In this macroeconomic environment of the stock market it cannot be forgotten that one of the safest alternatives is to be in full liquidity. To avoid less favorable scenarios for the equity markets and that can undoubtedly happen sometime from now on. To this end, there may be a very complex scenario that you should pay attention to when planning your investment strategy. In one sense or another and that will require one or another system to impose its actions on the stock market. With a whole series of variables that can arise at any time and situation.

Some risks are moving higher

Bankinter's analysis department refers to multiple risks, among which the following stand out: Chinese-American trade, Brexit, European cycle and demography. Where the prospects for Sino-American negotiations have improved. Even though we are now going through the “darkest moment” of Brexit, its final result will not be destructive (extension of deadlines and application of the safeguard clause to trade in goods).

It also shows that the European cycle has become the most vulnerable front and adverse demographics are consolidated as the most serious structural threat to the sustainability of economic expansion, especially in Europe. To this end, they are not so favorable for investors take positions in the stock markets. Or at least not with as much intensity as in the best of scenarios.

Favorable factors for the stock market

There are four bases to clarify this scenario in the equity markets in the opinion of Bankinter's analysis department. They are liquidity, interest rates, corporate profits, and the inertia of the global business cycle. The liquidity introduced by the central banks and which generated by global economic expansion they continue to drive up asset prices. Even the Fed will stop draining liquidity because it considers that the size of its balance sheet will be adequate in September.

And it does not seem that it is going to raise the rates again. In fact, no top-tier central bank will raise rates in 2019 (at least). The business benefits They continue to expand at a decent pace (S&P 500 + 9.7% in 2019, as an example) and the global cycle maintains its expansionary inertia, even when it has lost energy. This combination can only be bullish for the equity markets as an asset class and even more so if we consider the deficit of profitable investment alternatives: bonds with extremely low or even negative yields, deposits often subject to cost and real estate already at high levels.

Without expecting much from the bags

Bankinter's analysis department is in favor of being selective, like the last quarter: we prioritize the US stock market and later, assuming more risk, Brazil and India. We stand outside of Europe and Japanwhose potentials lack attractiveness. That has not changed. They believe that it is important to highlight exposure, but with a broad time perspective. Its updated valuations are somewhat higher than 3 months ago, with the exception of the Nikkei 225, whose expected returns are unattractive.

The Bankinter analysis forecasts increase its valuations for the EuroStoxx 50, Ibex 35 and S & P 500 Due to the fact that in the last 3 months the market yields (IRR) of the 10-year benchmark bonds have decreased proportionally more than the outlook for corporate results has been revised downward. That raises valuations a bit, but it relies on an uninspiring argument: interest rates are lower, which makes up for expected earnings to have been revised downward. The forecasts are 9,815 points for the Ibex 35, 3,634 for the EuroStoxx 50 and 3,249 for the S&P 500.

All this in a context of a solid dollar (between 1.13 and 1.20), the yen less weak than it should (124/130) and oil more expensive than it would correspond (Brent between 65 and 70 dollars Americans) for the probable maintenance of the cut by OPEC and that it can carry out.