Europe grows more than the US in the shadow of the dollar
Eurostat data reveal GDP growth of 2.2% in the Eurozone in the third quarter. Good news for the economic bloc, though not for all countries that comprise it. While France and Italy lead the growth, Spain and Germany are downgrading their forecasts. Generally speaking, Europe is performing better than the United States, which is leading once again to record levels in some of the European indexes.
However, according to Daniel Sancho, head of investments at MAPFRE Gestión Patrimonial, during the Ponte en Acción program on Negocios TV, it is important to look at where we are coming from. “The rebound in the US occurred before the one in Europe, and the American economy is more dynamic and adapts better to change. Our growth is somewhat greater than in the United States, but the dollar is still getting stronger than the euro,” he added.
According to the expert, this is an example of a fickle market. For example, there is the uncertainty of the steps the central banks will take against the backdrop of inflation. “It’s hard to interpret the economy based on the news that comes out each week. There are risks related to the upcoming data. We have to see the effects of inflation and the bottlenecks,” Sancho warned.
Not only is the Spanish economy falling behind, so is the Ibex. “It is an index that is very much weighted towards certain sectors where business is focused outside of Spain,” he said. Although he admitted that some companies are managing to adapt to the new situations, and there are investment funds with active management that are generating good profits.
In addition to inflation, the spike in the infection rate is being watched closely.
Sancho believes that, despite the increase in the numbers, “we have learned to manage the pandemic and the associated risks.” However, it remains yet another problem in addition to the many others already affecting the market. So it is important to remain prudent when investing, especially in fixed income. “It is a new situation. So it is best to diversify and understand the customer’s investment needs and terms,” he concluded.
To see the full discussion (spanish version), click here