"The market is preparing for a slowdown in growth that has already reached China”
The arrival of August, the quintessential vacation month, usually marks a turning point in market activity. Alberto Matellán, Chief Economist at MAPFRE Inversión, gives a positive overview of the first half: "We have seen an upward trend in stock markets, a textbook recovery and lots of monetary and fiscal stimuli, although we should consider the possible alternatives and what their effects would have been."
This optimism, which took hold in the first half of the year, looks set to continue for the next six months, albeit in greater 'moderation.' In this regard, Matellán says the market is preparing for "a slowdown in growth," although he recognizes that future data will provide "a more comparable and complete picture" of the entire pandemic.
This slowdown also seems to have been artificially established in the Chinese economy: "The Chinese authorities sought greater control, through regulatory, fiscal and monetary policies." Experts do not anticipate any major announcements off the back of the Fed meeting. In fact, Matellán confirms that investors will pay closer attention to the meeting at the end of August.
The Spanish government maintains its growth forecast at 6.5 percent, while the IMF has cut its forecast for Spain to 6.2 percent for this year. Matellán believes that these figures are within a reasonable range, but raises the question as to whether this growth "will be a rebound effect or persist over time." With this, he highlights a hopeful fact: "We have seen a significant improvement in profits."
Looking to the upcoming vacation season, he argues that this is not the right time for professional or retail investors to reorganize their respective portfolios. However, he points out that they should act in line with any change in "personal circumstance." He also recommends forgetting about the markets and enjoying the summer.