The next year that is about to arrive is full of uncertainties that will largely determine the evolution of the Ibex 35. In some that we have ahead of us that will lead to many ups and downs in this period. Without ruling out that volatility be the common denominator in equity markets, both national and outside our borders. But in any case, it will allow the appearance of new business opportunities with which to make the savings profitable from January.
Within this general context, there is no doubt that the identification of these uncertainties will be of great importance for Spanish equities. So that in this way, small and medium investors can develop an investment strategy strong> adjusted to their real needs. Where the preservation of the money invested in this period that we are about to reach in a few days will be a priority.
For this reason, nothing better than to offer what are the scenarios in which the Spanish stock market will move in a short time. With the main objective of obtaining more benefits from our operations on the stock market. Knowing at all times that it will not be an easy year for the interests of small and medium investors. And where one of the keys to the success of operations in the equity markets will reside in a correct choice of values that will make up our portfolio from now on.
Spanish stock market and a stable government
One of the factors that will determine the evolution of the selective index of Spanish equities is that a stable government can be formed in the coming days. Because there is a great risk that some third elections in such a short space of time. Where global economic growth may not even reach 2,5% as of now, as pointed out by some financial market analysts.
In the latter case, the Spanish stock market would be heavily penalized by the financial markets. To the point that a bearish pull of some relevance can occur that can lead you to lose a lot in open operations in the national equity markets. Especially with sectors as strategic as banking. With a very significant cut in valuation of their actions.
Brexit resolution
Of course, it will be another of the hot topics that small and medium investors will be watching. They can make you earn or lose money depending on how this complicated process ends. In addition, you cannot forget that there will be some stocks more affected than others. Where there will be a lot of money at stake during those days.
While on the other hand, the most affected stock sector can undoubtedly be the financial sector. Like the listed companies that have serious interests in that country. Therefore, from now on, you will have no choice but to be very selective when developing your next portfolio of securities. Fleeing from those most seriously harmed by the Britain's abrupt exit from the European Union. It is so simple that it can be very well understood by small and medium investors.
More severe recession than raised
The economic recession will also play a very relevant role on the trend that the economy takes. Ibex 35 in the coming days. Where the recession will go remains to be seen. Another aspect to be aware of is the evolution of the economic recession since any deviation, in one direction or another, will have an impact on the equity markets. To the point that it can be one of the catalysts that the stock markets can go down or go up in the next. But at the moment, and to the surprise of many small and medium investors, it has practically not been reflected in the financial markets. In other words, for the moment its effects are being null or with very little impact on the valuation of listed companies.
While on the other hand, it is also necessary to influence the fact that there are other parameters in which financial intermediaries are setting themselves to carry out their investment strategies. Because these are considered more relevant to take a decision with selected values from these precise moments. Very far from other circumstances that may affect the development of the main stock market indices and especially the Spanish one, which is the one that currently has a more indefinite position, at least in the shortest term.
Withdrawal of monetary stimuli
Of course the fact that the European Central Bank has injected liquidity into the equity markets is an explanation to understand how the stock markets of the old continent have not fallen during these past months. This monetary policy is still in force and it is not known when it will be cut. As long as the tranquility on the part of small and medium investors is in force, it must be maximum. Therefore, they should not fear sharp cuts in equity price valuations. If not, it may be a very opportune time to take positions from current price levels.
On the other hand, the moment equity markets stop being doped is when stocks can go down, and it is assumed with great intensity. Being the moment to close positions and direct our money to other financial assets that offer us more guarantees in the success of operations. But without a doubt that it will be a very dangerous time for our personal interests in the investment sector. And it may not be long enough for this monetary process to take place. Financial analysts suggest that it could occur in late 2020 or in the next two to three years. In any case, you must be prepared to develop an accurate investment strategy that prevents you from losing money in the financial markets.
Reaction to recent uploads
There is also a reaction that we can call technical and that is explained how it forms for drain the rises that have occurred in the equity markets since 2014. This is a very logical movement in its development and it would have to do with adjusting the law of demand and supply with these financial assets. In what is considered by financial analysts as a technical correction movement. And in any case, it would help you to open positions in some securities at much tighter and above all competitive prices. With a potential for higher appreciation than at the moment.
You must understand that nothing goes up and down forever, much less in the stock market. And of course there have been no cuts or corrections of any intensity as Spanish equities have remained at very long-term levels for almost two years. Between some margins that go from 8.600 to 9.500 points and with hardly any space for purchase operations in the markets. To the point that in this period it has been much more complex to make profitable the savings of our work performance. With percentages that have rarely exceeded or reached double digits, as was the case in previous years.
The trade war between the USA and China
It seems that at the moment it is a minor issue as it is about to sign an agreement between both parties. But that at any moment it can emerge with very negative effects on the equity markets. But calm for the moment since it seems that everything is controlled in this aspect, which has so much influenced the evolution of the stock markets in 2019. Where they rose as soon as they fell after a few days and without setting a defined trend to any of the permanence periods.
More worrisome, of course, is that Europe's manufacturing PMI index is at its lowest level in six years. Like China's growth, it has weakened at the slowest pace in 25 years. They are factors that are going to be listed on the stock market during the next twelve months that do not wait ahead. In this sense, the outlook is not as positive as with the trade war between the USA and China. And yes, as to create new and feared turbulence in the equity markets, as it is becoming clear in these trading days.
As well as the debt problems in some stock market sectors, such as for example that of the European telecos. Or even the lower profit margin on the part of banks as a result of the low interest rates that have been established in the euro zone in recent years.