in

Increase the pressure in the bags. Feliciano Macías. Investment advisor Renta 4 Málaga

A week of generalized corrections in world stock markets, which were more accentuated in Europe and the United States and mild in Asia, where, given the lack of relevant macroeconomic indicators beyond the PMIs for October and China’s 3Q20 GDP, the negative The evolution of the pandemic in Europe and the lack of political agreement in the United States to implement a new fiscal stimulus program, returned investors to an unflattering reality.

This situation is perfectly reflected in business results that continue to reinforce the thesis of economic recovery in “K”, where some companies have benefited from the situation and others are struggling to survive.

In this way, the Ibex was revealed as the best European index, remaining flat in the week against corrections of 1.7% in Eurostoxx 50, -2% in Dax and -0.8% in Cac, while in the United States S&P and Nasdaq fell about 1.5%. In Asia, on the other hand, the Chinese indices had a mixed behavior while the Japanese Nikkei remained flat.

As a noteworthy fact this week, the EU began yesterday to raise funds to finance the SURE program (100,000 mln eur in 2020-21) aimed at financing the ERTEs derived from the pandemic. 10 and 20-year bonds were issued for the amount of 17,000 mln eur with record demand (233,000 mln eur, 13.7x oversubscription).

Progress continues in obtaining the vaccine and treatments against the disease, although the challenge is not only its reliable obtaining but also its wide distribution, so we do not have a generalized solution in this regard before the middle of the year. 2021, although the announcement of a vaccine would undoubtedly be an important catalyst for recovery.

On the political level, the second and last presidential debate between Trump and Biden was held, less harsh and chaotic than the first. It should be noted that some 50 million Americans (out of a total of voters in 2016 of around 138 mln that is expected to increase in 2020) would have already voted by mail, with 10-11 days before the elections. We recall that Trump has already warned that he could challenge the electoral result in case of observing fraud in the vote by mail. Thus, the count could be lengthened and it could even be the Supreme Court who would have to decide the winner, in a process that would drag on over time and, without a doubt, would bring great volatility and uncertainty to the markets.

As for the results season, it is gaining traction in both the US and Europe ahead of this week’s onslaught. In the S&P, with 25% of the reported index, 81% of the companies beat estimates in sales and 84% in EPS, which registered falls of 3.7% and 17.2% respectively, with the energy and industrial sectors and cyclical consumption especially penalized, while health, stable consumption and technology are the only ones showing growth.

The ECB meets this Thursday, October 29. We consider that the pressure on the ECB to increase its monetary stimuli is growing more and more (current PEPP 1.35 bln eur, in force until June-21 and of which around 50% has already been executed), as can be seen from the latest comments from both its president Christine Lagarde and its chief economist Philip Lane, stating that the downside risks to economic activity persist. This pressure is derived from several factors: 1) the slowdown in the pace of recovery due to restrictions on mobility that seek to contain the expansion of Covid; 2) disinflationary pressures, with the general CPI for September at -0.3% yoy and the underlying rate at + 0.2% yoy versus the 2% target, and 3) the appreciation of the euro, which accumulates a revaluation of the + 11% from March lows.

Pjanic, this year’s star signing, complains that he plays little

Coronavirus: vaccines produced in Belgium could be delivered to the UK using military planes