We consider that there is a high level of complacency that the economic slowdown has hit bottom, still without confirmation, which is why we recommend taking profits and/or adopting a more defensive profile in portfolios while awaiting better entry levels.
Stock market valuations are attractive in historical terms assuming the consensus on PER and, even if PERs do not grow, European stocks have a certain way to go. However, we reiterate the idea that markets have advanced much in little time and there will be opportunities through out the year. We expect a certain profit taking in the short term, being acknowledgement of a bottom to economic deceleration (above all in Europe more in question) the necessary point of inversion to become more positive again. Until then, we adopt a more defensive trend facing a certain consolidation of the advances of the last four months.
From a technical point of view, the levels to look for are: Ibex 7,700/8,800 – 10,600/11,200, Eurostoxx, 2,700/3,100 – 3,550/3,700 and S&P 2,150/2,550 – 3,000-3,100.