The Ibex 35 hosts with raises the truce in the trade war between the U.S. and China
The trade war and, above all, the political instability at the european level and internal has taken a toll on all the countries of the euro zone, including Spain, where the Bag does not end to meet the expectations of the investors and the forecasts, according to Deutsche Bank, are not better to 2019. “Spain has lost the confidence of large managers,” said Diego Jimenez-Albarracin, head of equities of the company in Spain, during the presentation of the prospects for this year.
The expert does not have “too clear” the route of the financial sector and the electric in the coming months, due to the impact of global volatility and the “rumor mill” that points to changes in regulations and regulatory in both fields. Among these changes are the recent amendments to the mortgage law, the so-called ‘Tobin tax’ raised by the Government about the financial transactions or measures, which raises the Law of Energy Transition and Climate Change. These changes influence a lot in the loss of confidence of the managers, ensures Jimenez-Albarracin.
The entity has reduced to 2.4% growth prospects for Spain the next year, by the brake generalized by the external sector in Europe, the contraction of tourism to the recovery of other competing destinations and certain measures of politics as increasing civil service wages or the increase of pensions. Despite this, the bank remains confident in the fundamentals of the economy of the country and puts it ahead of other states of the Eurozone. In the words of Rosa Duce, chief economist of Deutsche Bank Spain, the irruption in the landscape of national political forces, such as Vox does not affect the perception of the foreign investor, since it does not put to question the permanence of Spain in the EU, or poses a risk to the monetary stability.
“The factors we think are very important here, do not affect both foreign investors”, says Duce, and “right now there is no fear of that in Spain there is a government breaking with Europe”.
on the contrary, our country has been more affected by the instability in Italy, both at the level of fixed income and variable income. “The Spanish market is still the big disappointment of the 2018 and does not reflect the Spanish economy,” said Diego Jimenez-Albarracin.
In a index so bancarizado as the Ibex, the bad behavior of the financial sector explains a good part of what happened. And this, despite the fact that the health of Spanish banks is, in the opinion of the analysts of Deutsche Bank, fairly robust. “We are very exposed to the volatility and any external factor affects them a lot”, hence the uncertainty in Italian and the insecurity of other markets such as Brazil, Turkey or Mexico has been moved to the parquet flooring.
Risk of trade war
Outside of our borders, the trade war is, without doubt, the major focus of risk for the global economy. “The biggest risk is that the conflict will go out of hand, but none of the parties are interested in going to a scenario of total war”, said Rosa Duce.
In this context, the bank expects the global GDP to grow by over 3.5% in 2019 and to rule out categorically a new recession. In the case of the US, their perspectives provide for an advance annual 2.4%, versus 1.6% in the Eurozone.
The bank also believes that us Federal Reserve might raise rates at least three times in the next 12 months and that in Europe, the end of the asset purchase by the ECB in January 2019, it will not slow down the growth.
all in all, the company continues to prefer the bag of the US in front of the the Old Continent, and, far from the fears by the recent fall of the great technology, they remain the betting favorite. Also expect good returns from sectors such as consumption, health, and the american financial.
In Spain, his portfolio combines values “whole life”, such as Telefónica, Inditex, Ferrovial and Repsol, with others as Cellnex.
regarding the debt, Deutsche Bank ruled out that Italy generates “a great debt crisis”, though he believes that the country is a huge focus of volatility.
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