Post by account_disabled on Feb 20, 2024 3:28:55 GMT -5
that the stock market has risen a lot. -and, what scenario would work against this happening? Aside from black swans, why are rates starting to fall faster than the market expects? Well, because the market could interpret it as having been raising rates, which has caused a notable deterioration in the economy and that the only solution is to lower rates, and more than expected. -inflation refuses to drop below 3% in the united states. Is the fed going to take rate cuts slowly? If we look at historical behavior of fed rate movements, I would opt for a calm in the rate reduction. Normally, when they have reached their peak, it has taken several quarters before turning the helm, and this time I don't think it will be any different. Hence, an abrupt drop could cause declines in the stock market. Luckily, we have countries like india that can su Country Email List pport what china lost. -guindos (luis) asks not to rush with rate cuts... It is another economic policy. The power of words has been proven to be another policy that helps achieve objectives. When they told us, be careful, that the economy will go badly and that we could all be harmed, what did we do? Well, save for what might happen or consume less. And of course, less demand equals less inflation. With phrases like this you allow people not to relax and start consuming more, you allow people to continue with caution, you allow inflation not to rebound. -will central banks continue to be the main catalyst for the markets? The main catalyst for the markets has been corporate profits. In periods of 10 years, 75/85% of the increases are explained by the increase in profits, and only 15/25% by an increase in multiple. That is to say, central banks, with their injection of money, only explain a minimal part in the long term.
That is why you always have to look at what a printed dollar or euro contributes. Printing for the sake of printing only generates bubbles. You have to print thinking, how will it help? It will allow more productivity, it will allow opening new markets, new sectors, it will allow improving health, and thus have a healthier demand, or education will be homogeneous and allow equal conditions for brilliant minds. Printing money should grant freedom, not eliminate it. -the eurozone has avoided recession… for now? For now yes, until the notary of the economy called faith unemployment rate. Economies walk on glass floors, any wrong move can crack them. And in europe, furthermore, we must start thinking about changing the economic model. The main catalyst for the markets has been corporate profits the permanent loss of cheap gas, the increase in chinese competition, or the protectionist policy has meant that germany's chemical sector is no longer as competitive, the automotive sector sees its threats increase, or the technology sector is not as cutting edge as it could be. Luckily, there are always exceptions and these companies will be the ones that help us get out of or avoid all recessions. -on both sides of the atlantic, should we continue to be concerned about prices? If we look at the growth of monthly inflation, it stands at 0.3% in the us and 0.20% in europe.
If this continues, we could find inflation of 2.5-3.5% in america and 1.5-2.5% in europe before summer. The only concern could appear when the economy accelerates again, which could lead to an increase in energy prices caused by the lack of investment in recent years. And at that point, inflation will be a problem. Because we thought, how is it possible that with the economies so battered, the kurdish price is at $80? What will happen when they are activated? We will see. -if the stock market boom continues, what sectors are going to boost the indices? Ugh, this would be making bets and at trea we don't make bets but investments. But we think that companies with little debt, with competitive advantages, are the ones that will benefit. From certain automobile or auto parts companies that benefit from the car having more options, to luxury companies, to industrial companies that benefit from the energy transition and digitalization of companies, to semiconductor companies whose competitive advantage increases by as technology advances, or copper companies that benefit from the energy transition. There are many gems still out there. You always have to look at what a printed dollar or euro brings. Printing for the sake of printing only generates bubbles -what will be the economic engine if china's is affected? The electric car, medicine, the energy transition, the aging of the population... Luckily, although there is a lot of talk, we have countries like india that can support what the asian country has lost. -how have things been going for trea in the last two years? Well, quite well, the global and european equity strategies have done quite well. In 2023, the global company was within a position of being in the medal table and in the top 10% in terms of three-year returns. While the european in the top 10 in 2023 and second quartile in three years.