Opportunities on the stock market for the second half of 2024

The prospects for equity markets are optimistic for the second half of the year, after a fairly positive first half thanks to good corporate earnings and macroeconomic data. Ismael García Puente, head of investments and fund selection at MAPFRE Gestión Patrimonial, believes that equities will continue in that vein. As far as Spain’s IBEX 35 goes, the revaluation of almost 10% since January is due to the good performance of banks. “Spanish banks have been able to maintain margins, have barely paid for the liability side of things and have greatly boosted revenues,” he points out, although he believes that opportunities within the sector lie in insurance companies and companies exposed to capital markets.

On the downside, García Puente reckons that strong ties with Latin American companies could end up weighing down the index, given that Latin American equities have seen the worst performance worldwide since the beginning of the year. “If the situation worsens, it could harm Spanish companies' quotes,” he said.

For the next results season, which is about to kick off in the United States, MGP's head of investment and fund selection believes that the financial sector will deliver positive figures, although profit growth won’t be the highest, at around 4%.

Airlines, for their part, are showing strong growth, although García Puente sees it difficult for them to recover their pre-pandemic margins. "We’re seeing historic highs in traveler numbers, but they’re mostly tourists, so the margins are tighter. It’s also a sector that has been hit hard by inflation and rising costs," he explains.

Looking toward the holidays, he believes that this is not a good time to change strategy and points out that the key is to diversify in equities and pay more attention to fixed income.

The French elections had little impact on the stock market

The French elections, with the second round held on July 7, paint a complicated picture for Spain’s neighboring country. Uncertainty is no friend of the markets, although elections don’t usually have much of an impact on them.

"What the elections in France have made clear is that it’s a difficult country to govern, but, a priori, that’s not necessarily bad for the stock market. Yes, it could be for public debt in the medium and long term,” says García Puente, adding that large French enterprises are diversified internationally "and don’t necessarily have to deal with any related consequence either.”