Jaume Puig (Managing Director GVC Gaesco Gestión) | Recurring terrorist attacks end up making the markets immune to them, so that is one good reason to buy stocks now in August after the tragic events in Barcelona.
Cristina Martín (GVC Gaesco) |With most investors on holiday in the month of August, stock market volumes are traditionally low. This factor, combined with the effect of specific economic and political events can fuel a rise in volatility and huge fluctuations in prices.
Various world-renowned experts are increasingly doubtful that the stock markets’ level is sustainable. But there is still huge euphoria. While money remains cheap, in relation to the expectation of gains, speculation will continue.
World stock markets are at record highs, particularly in the US, boosted by the promises of a heavy investment drive made by President Trump. But the fundamentals don’t support the markets’s strong performance, which is causing some concern.
Making judgements on “whether a market is expensive or cheap,” using aggregates of prices and earnings, is a very risky simplification. To begin with, there are companies which don’t make money or even lose it, and quite a lot of it. Responsible, professional investors don’t buy stock markets indices, they buy shares. They don’t invest “top-down” but rather “bottom-up”.
Investors realise that the political risk in France has decreased substantially and are less concerned about what might happen on the political front in Italy and Germany. Now it’s time to look at companies’ fundamentals once again and continue to focus on the ECB’s decisions over the coming months.
The Spanish equities market saw a turnover of €652.907 billion in 2016, a decline of 32.1% from a year earlier. The fall is in line with the general decrease in volumes registered in stock markets across the world. In December, trading volumes fell 27.5% to €48.987 billion from a year earlier.
Most analysts believe the recovery in the stock prices of Spain’s four big Socimis will continue over the coming months. Between 70% and 80% of all brokerage houses have a buy recommendation. The fact these property investment vehicles have quite high returns and there is very little competition are amongst the positive factors.
The main US stock indices (S&P 500 and the Nasdaq) are at record highs while the European bourses have lost over 10% in the year to date. And that’s despite the fact that they recovered almost all of their ‘Brexit’ losses in July. Such a disparate performance is not because US corporate profits have been better, as you might expect, but is due to other factors associated with more solid economic growth, a healthy jobs market and inflation-related gains.
José A. Santos (Patrivalor) | The value of the 60 Spanish companies listed on the stock market stood at 536.499 billion euros at end-July 2016, down 9.0% from end-2015, Patrivalor says.