Will the bullish streak continue until the end of the year?

With just one month left to close the fiscal year, markets remain upbeat, and according to Alberto Matellán, General Manager at La Financière Responsable, that optimism could last a while longer. “I think the trend may continue, because the reasons behind it should not necessarily disappear,” he says.

Among the factors supporting this strong performance, he highlights “liquidity, good results compared with macroeconomic data, and overall market sentiment,” all of which he believes are unlikely to falter in the short term, as he explained in remarks this Wednesday.

The expert nevertheless warns that this period calls for caution: “We are a month away from year-end, a time when many portfolios shift and positions change,” a context that calls for prudence: “I would rather lose my last euro than risk sudden swings.”

Asked whether he expects a rotation of assets and sectors, Matellán clarifies that such moves may occur as specific tactical strategies, but are unlikely to become a broader trend: “When professionals see high valuations, it is normal to rotate, but if we have already met our targets, we tend to rotate into cash and then reinvest. We only move into another sector for reasons beyond valuation,” such as tracking an index or spotting attractive opportunities. He also notes that index investing, which now carries greater weight in the market, tends to reinforce these trends: “Sectors that are already highly valued often strengthen even further.”

Germany: confidence under question

In Germany, recent data show inflation at 2.3%, suggesting it is under control, but confidence indicators have been disappointing, compounded by polls showing Chancellor Merz’s low popularity after six months in office. Assessing the country’s situation, Matellán says it is not especially worrying, since a weak economy had already been expected, and it remains stable nonetheless.

He places more emphasis on structural challenges: “Germany needs to rethink its economic model. It faces very strong competition from Asia in key industries, and the complexities of global trade have changed the playing field significantly.” In that context, there is a loss of confidence “because there is no clear sense of where its economic model is heading.”

In the United States, one of the key issues is the deterioration of the labor market, as seen in private reports, with official data still pending due to the government shutdown. Matellán points out that the main factors affecting employment are tariff disputes, which are having an initial negative impact, and artificial intelligence, which is making certain business processes more efficient and therefore reducing the need for labor. However, this also leads to higher productivity, which could translate into higher wages.

As for the Federal Reserve, Matellán notes: “The Fed is already in rate-cut mode, or at least pursuing a more relaxed policy,” meaning this weakening could provide further justification for that approach. According to Matellán, the Fed faces the challenge of fitting together the “puzzle” of keeping inflation under control while also stimulating the economy and supporting the job market.