FINANCE | 29.04.2021
“The perception of Europe and Latin America will improve from June and the Ibex will benefit”
MAPFRE Inversión Chief Economist Alberto Matellán gave an interview with Radio Intereconomía, during which he explained why this was the case: “Uncertainty persists across Europe due to its lower rate of vaccination and higher incidence of the virus in April, and we mustn’t forget that the Ibex has a high exposure to Latin America, which has an effect on business results. This is, however, temporary. In Europe, the macroeconomic data are picking up, and the perception of both Europe and Latin America will improve from June.”
Meanwhile, a certain level of euphoria can be sensed on Wall Street. Are stock markets becoming overvalued? Matellán concedes that while some ratios are above the historical average, they are below what we saw during previous crashes, such as in 2008. But the current monetary stimulus renders this type of comparison inadequate. “A dollar today is very different from a dollar two years ago,” he said.
In the US, two key dates stand out: the Fed meeting, and the moment Joe Biden—approaching his 100th day in office—gave his first speech to Congress. However, the MAPFRE Inversión Chief Economist does not expect any major developments beyond the possibility of referring to what other central banks are already doing, such as the Bank of Canada, which has slowed its expansionary policy.
And back in Europe, how each country implements its recovery plans with the aid received remains key. In this sense, Matellán pointed to the example of Italy and the announcement made there last Monday, with Mario Draghi at the helm.
On the business front, results are “encouraging.” The expert specifically referred to the fact that all business lines and all geographic areas are showing progress, “suggesting that recovery is fairly widespread.” “Roadmaps to the future are also looking more optimistic, and that is more important for stocks than anything that has already taken place,” he adds.
Lastly, Matellán warns individual investors—especially if they have a more conservative profile—not to be lulled into taking greater risks after seeing how some people investing in the stock market are making huge gains while those investing in bonds are losing out. “If investors feel uncomfortable, they should review their profiles and objectives,” he concluded.