This has meant that analysts are no longer ruling out a new recession in Europe. Matellán downplays this however, and sees it as being somewhat anecdotal. “Following on from years of strong growth, the fact that there are two consecutive negative quarters, the prerequisite to define a recession according to the traditional definition, means little. GDP has performed well in recent quarters. We don’t know what the actual economic effect of the new measures will be, but we do know that they will be less damaging than in the past,” he added.
Across the Atlantic, all eyes have turned to Joe Biden, who is taking up the US presidency. But also to the new Treasury secretary, Janet Yellen, who has called for the US to “act big.” “Yellen wants to transfer to the Treasury what she has already done at the Fed. This may be a good thing because the Treasury is going to work more closely with the Fed. These are expansionary monetary and fiscal policies, which involve printing countless amounts of dollars and distributing them among citizens. This also has an impact abroad, for example in China,” said Matellán, who, nonetheless, warned that although these policies provide relief in the short-term, they carry long-term risks.
In the United States, the corporate earnings season has also begun. Matellán recalled that profits had been impacted significantly in 2020, though less than the hard and fast GDP figures that we are seeing might imply. This is due, among other reasons, to this public support, but also to the fact that many of these figures have successfully readjusted. However, he added that the important thing was to see “how those profits are evolving in the future, to see if expectations are being met.”
As he does every week, Alberto Matellán provided investors with his recommendations: “Don’t get swept up in the market narrative,” something which applies to both institutional and private investors. “The former should look at whether this positive trend really complies with the fundamentals, and the latter, who may not have this capacity for analysis, should set out their personal goals and find a good advisor.” That said, “We are heading in the right direction,” he concluded.