Anchor Insights January 2023

• The economic reopening of China will surely have positive effects for the world economy... but watch out for the increase in infections due to Covid-19.
  
• Central banks are preparing for a pause in rate hikes as inflation begins to ease.
• Corporate earnings are forecasted to drop 7% in the US and 11% in Europe, so a mild recession would already be discounted.

• Health: stable income and margins supported by public spending.
  
• Agri-food: the climate crisis and the war in Ukraine put pressure on food prices.
• Staples: with the capacity to transfer price increases to the consumer.
• Financials: you benefit from an environment of rising interest rates.
  

Long term opportunities:

• Technology: Although there may still be volatility, attractive multiples and higher growth than other sectors.
  
• Cyclical consumption: It usually bottoms out before the start of recovery.
  
• Renewables: the need to decarbonize drives huge investment plans in renewable energies.

• Credit spreads at medium levels, both in European and American bonds.
• IRR stabilization in government bonds, both European and American.
• High Yield in both euros and dollars may be affected by the increase in default rates. The BB sections are interesting.
• Selectively, emerging countries with limited external indebtedness.

• The euro and the dollar remain in the 1.10-1.05 range. Increased tendency to weakness in the USD by phase of the monetary cycle.
  
• Real estate bubble risks in some countries (Nordic, Canada, USA, Germany, United Kingdom), although not in Spain.
• Recession risks put downward pressure on metals and energy. Volatility in agrifood raw materials. Fundamental reopening of China for commodities.