Profitability Reports of our clients from January 2018
Wednesday, 07 of February 2018
World Macro Panorama,
Theresa May ,
GLOBAL MACRO PANORAMA
EURO ZONE: After the last meeting of the ECB, Mario Draghi confirmed the recovery of the region and the intention to keep rates at current levels in a time horizon exceeding the completion of the asset purchase program.
Regarding the appreciation of the Euro, Dragui considered that some movements have been generated by the strength of the economy of the region, however he referred to the statements of US treasury secretary Steven Mnuchin, who in his speech in Davos, said that In this respect, Dragui pointed out that "the use of language does not reflect the agreed terms of reference", citing the agreements against the competitive depreciation of the International Monetary and Financial Committee.
The GDP of the area grew by 0.6% between October and December, one tenth more than the previous quarter, registering an expansion of 2.5% for 2017.
At the political level, the panorama for Germany is clear, since negotiations have begun for the consolidation of a government block between Angela Merkel's party and the Social Democrats.
UNITED STATES: The Fed met for the last time under the mandate of Janet Yellen, with a decision to maintain unchanged interest rates in the range of 1.25% to 1.5%, the next meeting in March will be chaired by Jerome Powell.
Although the market discovers that a continuity policy by Powell is maintained, there is a likelihood that the pace of rate increases will accelerate in the face of a surprising increase in inflation.
The CPI ended the year with a variation of 2.1%, was read as positive by the market in that core inflation, which is the indicator that follows the Fed, stood at 1.8% (Estimated 1.7%). For his part, Donald Trump in his first speech on the State Union before the congress, has maintained its nationalist tone while showing as achievements of its management the recent macroeconomic figures (acceleration of GDP and minimum unemployment).
As regards trade relations, uncertainty remains over the renegotiation of the North American Free Trade Agreement NAFTA with the protectionist initiatives of the US government, while Trump announces its intention to renegotiate the Trans-Pacific Partnership Agreement ( TTP) with better conditions for your country.
UNITED KINGDOM: We have mixed data throughout the month, on the one hand the unemployment rate remains at levels of 4.3% in line with expectations, however the PMIs have shown setbacks with respect to the previous months and the GDP at the end of 2017 recorded its lowest growth of five years standing at 1.8% despite having a slight rebound in the last quarter.
The British Prime Minister, Theresa May, made an official visit to China whose objective was to consolidate commercial relations before the impact of the departure of the United Kingdom from the European Union.
Moody's indicated that the credit rating of companies that do not belong to the financial sector will remain stable in 2018 and foresees that an agreement will be reached to maintain free trade with the countries of the Union.
JAPAN: The Bank of Japan maintained its monetary policy unchanged in the face of weak signs of acceleration in inflation. However, he hopes that in the coming weeks the negotiations between unions and employers will achieve wage increases that would approximate the CPI in the medium term.
The government of Japan, announced that it is not willing to renegotiate the Trans-Pacific Partnership Agreement (TTP-11 in its new version after leaving the US) in case of a US accession would be done under the conditions currently agreed.
CHINA: GDP at the end of 2017 had a variation of 6.9% exceeding consensus expectations, growth was supported by the services sector, agriculture and by the pick-up in domestic demand.
- Liu He, economic adviser to China, in his speech in Davos acknowledged that the country's debt is very high, however he explained that the current measures will regulate this indicator within three years; This happened after a debate in the same forum that concluded that the Chinese debt is the most serious threat to the world economy
The markets maintained the benefits in a generalized way, boosted by good macroeconomic data and the optimism of the investors. Wall Street continues to lead the gains, the Dow Jones ended the month with an advance of 5.79% while the Nasdaq and the S & P500 added 7.36% and 5.62% respectively. The business results in the United States have exceeded expectations, close to 80% of the S & P500 companies have obtained higher than projected profits, and the weakness of the US dollar has rewarded the behavior of the multinationals in that country.
In Europe, equity markets recorded gains between 2% and 4%, led by the Spanish stock market. The exception was the FTSE100 index which ended the month with a -2.01% retracement to disparate macro data as well as weak business results.
On the other hand, in the Asian markets, the Japanese selective Nikkei225 added 3.2% gains while Hang Seng registered an unprecedented increase of 9.9% monthly. Emerging equities also ended the month in positive territory with average earnings between 4.5% and 5% per month.
At a sectoral level, we highlight the behavior of technology and cyclical consumption companies with advances of over 6%, supported by the synchronized growth of the world economy and the improvement in expectations.
In the currency market we highlight the performance of the EUR / USD that rose by 3.5%, standing at around 1.24 EUR / USD in the month of January, despite the latest monetary policy decisions of the ECB and the FED .
As for raw materials, the prices of gold and crude finished the month with important advances. Oil closed around 69 usd / barrel supported by OPEC and Russia's intention to maintain production cuts and the possibility of giving continuity to the agreements in 2019. While gold was at levels of 1,344 usd /oz.