This Week's Focus: What balance we can extract from the first third of 2015?

This Week's Focus: What balance we can extract from the first third of 2015?


What balance we can extract from the first third of 2015?
If we make an overall assessment of the behavior of financial markets during the first four months of 2015, it is undoubtedly positive. However, it remains a concern among investors about the worsening of the reports on GDP in three of the major world economies. US, UK and China, as well as some sources of uncertainty as the Greek problem.

In the US, much of the slowdown can be attributed to a decline in investment spending in exploration of energy companies. This trend is likely to continue in the second half of the year, although the improvement of household budgets should positively affect consumption.

As for corporate earnings have been mixed, but generally positive. On Wall Street, about 70% of companies have exceeded expectations. However, the result can be misleading. The consensus of analysts had forecast located at very low levels, predicting lower profits due to the strong dollar and falling oil prices.

The manufacturing PMI is a reflection of the slowdown in US activity indicators:

United Kingdom
Concerning the United Kingdom, the economy has expanded a poor + 0.3% in the first quarter. The slowdown is largely evident and is given by the strong growth last year and the weakness of the manufacturing sector. The British labor market, meanwhile, remains strong and with improved levels of unemployment (5.6%) and higher wages (+ 1.8%).

In the Euro Zone it has increased loans to the private sector for the first time in 3 years (+ 0.1%), while other economic indicators suggest the strong advance of the recovery. Although the data are positive, the ECB has already announced it will continue to buy assets worth 60,000 million euros per month.

In the bond market, the TIR remain at low levels (despite the strong rallies in recent days), giving little tour and return ratio / unattractive risk.

Despite the obvious slowdown in the Asian giant, the stock market has generated significant profits in 2015. A large part by the actions of BPC (People's Bank of China) is explained, to stimulate the economy by cutting the reserve ratio by 100 pts. basic, improvements in state enterprises and increased lending.

Foreign exchange
In the currency market, the EUR / USD has rebounded to levels of 1.13 due to the weakness of the greenback. The dollar accuses the bad US economic data, which in turn could lead to postpone the planned rate hike later this year.

Macro factors
One of the important factors, remains the Greek conflict and negotiations with institutions. As they spend the dates and no prospects that the Hellenic country receives more aid from lenders, increasing the likelihood of a breach of the Greek debt.

However, the finance minister of the Hellenic country, Yannis Varoufakis says he hopes to reach an agreement with creditors in the coming weeks.

Another aspect to be considered were the general elections in the UK, which could lead to tensions in the stock markets in the short term. The results were well received by the financial markets, leaving the Conservative Party David Cameron on the verge of an absolute majority.

The main investment fund managers, continue to show positive about European equities. A weaker euro should continue to facilitate exports from the old continent and competitiveness and corporate earnings. The ECB continues to apply ultra-accommodative policies, which should also help market. However, we must be aware that they are artificial or unnatural aids and market rates and are at demanding valuations.

In what refers to bonds, the returns are very attractive (despite the rally of recent weeks) and the risk-return does not pay. However, purchases worth 60,000 million euros monthly ECB should keep pushing the TIR down, although some factors such as uncertainty about Greece may affect the contrary.

Oil prices should stabilize in the USD 70-75 / barrel (see Article 16 March), while the slowdown in US activity indicators can curb the appreciation of the dollar against the euro.