Anchor Insights April 2025

• Slight setbacks in Europe while the falls continue in the US, especially in technology. Better performance of emerging markets.
• Uptick in spreads and rates in fixed income.
• Despite maintaining rates, the USD retreats against the euro.
• Gold and metals are rising sharply.

• Tariffs on American imports much higher than expected.
• Recession risks on the upside because of the trade war.
• Sharp increase in volatility, correction and possible start of a bear market.
• Q1 2025 results will begin. Effect of tariffs on forecasts.

Opportunities:

• Technology: high growth, but high valuations; Accumulate in falls.
• Utilities and communications: margins improving.
• Health and biotech: higher growth than other sectors and attractive valuations.

• Credit spreads at average levels in European bonds, but high in American bonds. 
• Rally in IRR in government bonds, both European and American.

• The dollar breaks lower and enters a new range of 1.07-1.12 on recession risks. The weakness of the USD due to the evolution of the public deficit and debt may be counteracted by geopolitics temporarily, but it should depreciate the greenback in 2025.
• Gold exceeds 3,000 USD in the face of increased demand from China in its change in reserve policy and as a refuge from uncertainty.

• Macroeconomic divergence between regions, reduction of liquidity in financial markets, volatility.
• Reduction of international trade, tariffs and increased costs, more inflation.
• Increase in cybercrime, disruptions in essential infrastructures.
• Financial fragmentation of the Euro-public debt market, debt crisis.
• Political incapacity in the face of inflation, climate crisis and migration cause social tensions, populism.
• Extension of the Israeli-Palestinian war to the Middle East, oil at 200 USD.
• Conflict in Ukraine, escalation of NATO-Russia tension, maintenance of sanctions.

• The trade war opened by Trump increases the risk of global recession at a time of divergence in the phase of the economic cycle between the US, Europe and China. The less restrictive monetary policy slows down in the US, continues in Europe and becomes expansive in China while the US continues to grow, Europe is facing recession and China is looking for recovery. The sustainability of the US debt makes it difficult to lower rates without a budgetary adjustment, in the face of a new legislature dominated by an increase in the deficit.
• The expected growth rate of earnings remains at 12.7% in the US and 12.5% in Europe for the next 12 months, although it will be revised downwards due to the effects of the trade war. 
• The war in Ukraine continues with small advances towards a truce, while in the Middle East it fails.