Anchor Insights November 2024

• Stock Markets: Flat or with slight cuts due to mixed corporate results and sales and profit warnings.
• Fixed Income: Cuts due to slightly higher expected returns, making the yield curve positive in intermediate terms.
• Gold: Continues to set records, oil stagnates near $75, and bitcoin reaches new highs.
• Dollar: Recovers ground against the euro, awaiting new moves from central banks and presidential elections.

• The US election result will have short-term implications for stocks, bonds, and the dollar.
• The Middle East conflict adds pressure to the oil market, keeping prices volatile and close to $75.
• China continues to send a message of commitment to its economic recovery.
• Volatility is down ahead of a year-end rally.

Opportunities:

• Information Technology: Take advantage of significant corrections to accumulate.
• Real Estate and Energy: Undervalued, although still facing many headwinds.
• Health and Biotech: Higher growth than other sectors and attractive valuations.

• Credit spreads at average levels, both in European and American bonds.
• Stabilization of yields in government bonds, both European and American.

• The dollar breaks the 1.11-1.05 range and adjusts between 1.085-1.12. The weakness of the USD due to the evolution of the public deficit and debt may be temporarily countered by geopolitics.
• Major cryptocurrencies stabilize ahead of the anticipated USD rate cut.
• The price of industrial commodities and metals may be weakened by lower demand from China and India, while gold could fall if inflation drops and central banks continue to reduce their balance sheets.

• Extension of the Israel-Palestine war to the Middle East, oil at $200.
• Conflict in Ukraine, escalation of NATO-Russia tensions, maintenance of sanctions.
• Political incapacity in the face of inflation, climate crisis, and migration causes social tensions, populism.
• Financial fragmentation of the Euro public debt market.
• Reduction of liquidity in financial markets, volatility.
• Increase in cybercrime, disruptions in essential infrastructure.
• Bank stress tests, greater capital needs, and reduced access to financing.

• Improved business expectations foster a cyclical recovery. Shift in monetary policy towards a less restrictive phase, although concerns about job deterioration associated with economic recession begin. Additionally, the rapid implementation of Artificial Intelligence (AI) in production processes exerts deflationary pressure. China's attempt to boost its economy may favor or hinder global growth and influence inflation.
• At the corporate level, profit growth slows, and the first profit and sales warnings appear. The sustainability of American debt complicates rate cuts without a budget adjustment.
• The Israel-Palestine war becomes chronic and extends in the region, while the conflict between Ukraine and Russia continues. European countries increase military spending, and the US seeks a pact between Saudi Arabia and Israel to focus on the Asia-Pacific region in its struggle with China.
• Political uncertainty increases, with the rise of the far right in the EU and a Trump victory in the presidential elections, leading to greater market volatility in the coming months.