“Trump has broken trust, but now there may be a positive development in the stock markets”

The tone of stock markets has been downward over the last two months, weighed down by fear of the effects of a possible tariff war and other tough-line measures by Donald Trump, but the situation shows signs of some stabilization and even moderate upturns have been seen in the most recent sessions. For Alberto Matellán, General Manager of La Financière Responsable, all of this is explained by the loss of confidence caused by the White House, something that has not been reversed; however, if progress is made toward a clearer scenario, the market’s performance will be positive.

“What has happened over the past two months, even before ‘Liberation Day,’ is that Trump has broken trust—the market doesn’t trust Trump or the economy. And once trust is broken, it’s difficult to rebuild it, but also harder to destroy it further. Only by making things clearer can there be a positive development for the stock markets in general,” said Alberto Matellán, who heads the French subsidiary of MAPFRE specializing in ESG investment.

In the case of fixed income, Matellán explained that the “rout in bonds,” especially U.S. bonds, was also due to the lack of trust in the issuer, which is now seeing some recovery as analysts sense that Trump is backtracking and that his announcements are “a way of doing politics,” and not all of them will “translate into the economy.” However, he noted that confidence in bonds will be “more difficult to rebuild” than in equities.

This week a new Fed meeting will take place, and the economist argues that the message of chairman Jerome Powell, despite Trump's pressures, must be “now more than ever” calm. “Consensus expectations have moved a lot, but without clear direction, and until there is a consensus, monetary policy should not act,” he claims.

Deepening the trade war between the US and China, Matellán believes that it will end in a positive way, “understanding this as an agreement that allows international trade to continue,” because neither party is interested in continuing the confrontation, which harms both countries.

In the Eurozone, it was reported this week that retail sales fell by 0.1% in March, a figure that Alberto Matellán does not see as “particularly concerning,” because the market consensus already anticipates weak economic growth in Europe. Therefore, as long as the figures don’t deviate significantly from expectations, this negative news will not have a major impact on valuations.