Manuel Pinto, market analyst, highlights that the rise in bonds, with an American 10-year reaching the level of 4.7%, the highest since last April, is also doubled in Europe. We have also seen bonds rise and It is already mainly the main focus of attention.
He considers that the market distrusts central banks, distrusts inflation expectations and this in the end especially in the longest sections of the curve, what is causing are upward increases that are also causing because it is in the technological companies, especially if there are or companies with higher levels of debt than there is, a new catalyst in this case is negative for what lies ahead in 2025.
Y, Despite this more complex and volatile stock market scenario, it is clearly betting on utilities, which is considered the star sector in 2025.
His argument is supported by the fact that, although we are seeing these increases in inflation, we must take into account that in Europe the historical problems we have had are the opposite, that is, not achieving a price growth objective. not even at the 2% level.
To give an example, In the 120 months before the war in Ukraine, in 93 of them the European Central Bank, Europe did not reach the 2% target. The thing is that Europe historically struggles for a situation in which inflation is low. If it is true that we add Donald Trump’s tariffs, which will have direct implications on prices, but also be careful because it will have direct implications on prices in China and Chinese companies are not going to sit idly by and do so. What it will try to do is sell these products at lower economic levels in Europe, which it cannot do in the United States. Which will cause there to be a balance at the tariff level in prices.
If we add to this that in Europe we do not have historically high inflation, we add negative economic growth, employment data that show some signs of weakening and in general low growth with political instability and high levels of debt, It leaves us with a scenario in which the European Central Bank has a totally leading role.and that will imply aggressive rate cuts, expansionary monetary policy measures that will cause, from our point of view, that despite the increases in bonds that we have seen in Europe in recent weeks, we are at a historic moment for the conservative investor can acquire carry through these debt securities and also to the sectors most related to debt interests because they can also do well, for example in the case of utilities.
He also highlights that, due to his future projection, continues to fully trust Big Tech.