Pablo García, general director of Divacons Alphavalue, points out that the indices are performing spectacularly. They especially stand out Brazil, but also points out the rise of the Ibex 35 and the Nikkei. The only index that is very slightly negative, practically flat, is the Nasdaq. For its part, the Dow Jones rises around 0.4%. That is to say, optimism clearly returns to the markets.
And he highlights that there are several factors behind this. First of all, that Mr. Trump has lowered his tone somewhat, which always tends to be good for the markets, even if he thinks otherwise. And, secondly, business results. The fourth quarter has seen a strong rebound in profit expectations, both in Europe and the United States. In the US, the consensus already expects growth of 13.5%, after profits increased by 15% in the third quarter. In Europe we are still in negative territory, but around -3.1%when we came from much worse figures.
It is true that we have seen volatility in other assets: precious metals, oil—with the whole Iran issue—and also in the Bitcoin. This is where the so-called “wealth effect” comes into play. Some media commented that many investors who previously rode around in Lamborghinis thanks to bitcoin could now experience a negative wealth effect that affects consumption. We’ll see if that happens. In any case, The Financial Times has already warned that even at levels of $70,000, Bitcoin is still overvalued.
All this connects with the debate on safe haven assets, something that we at Divacons-Alphavalue have always criticized. The volatility we have seen in these assets could carry over to equities, especially once earnings season ends.
The period after the publication of results is usually scarcer in news and favorable for taking profits. Therefore, we do not rule out seeing a little more correction and volatility at the end of February, although the underlying theme will remain the same.
Doubts persist about CAPEX and artificial intelligence, although We continue to think that it is an opportunity to continue investing. I would also highlight the excellent performance of metals and mining, a sector that we have been defending since June of last year. In addition, we have positions in utilities, with Iberdrola in telecommunications, with Orange; and in construction and infrastructure, with companies such as Vinci o Eiffagewhich are doing quite well.
The rest of the market is trying to find its momentum through sectoral rotations. We have seen it, for example, in the luxury sector, with results such as those of Kering or in the automobile sector, where the Stellantis profit warning confirms something that we have been saying for some time: it is a sector that is suffering, that will continue to suffer and where, beyond some specific rebound, we do not see clear catalysts.
And he points out that he remains convinced that AI, artificial intelligence, is the future. The impact on productivity will be enormous and the difference between investment in the United States and the rest of the world is abysmal. These companies will lead the new technological revolution. Medium-sized companies or Europe may be left behind, and China still does not dare to invest with the same force, but each cut in companies like Palantir, Alphabet-A, Amazon or Microsoft is, in our opinion, an opportunity.