Analysts point out that, “despite last week’s rebound, the stock markets are blocked from Jackson Hole because they continue to digest the fact that, as far as rates go, they will not go down throughout 2023, contrary to what it was thought. They need something to guide them to decide to move in some firm direction, but they can’t find it and, consequently, they begin to be skeptical about US inflation on Tuesday the 13th or the Fed meeting on the 21st”.
For his part, Javier Molina, senior market analyst at eToro, is clear: “The end of free money has come and now it will be the governments that will have to do their homework and control the deficit. At the moment, the increase in the cost of financing will not be an easy drink to digest. Likewise, the euro will be able to stop depreciating, at least at the rate it has done in recent months, at the speed seen to date”.
“The market faces another week between questions about whether we have bottomed out or if, on the contrary, the effect of the increase in rates will end up severely impacting the economy and, consequently, business profits and employment. At the moment, the economic slowdown is a reality, but it is not depressed enough to start discounting rate cuts”, adds Molina.
“Our market vision continues to be prudent in an environment of high uncertainty and an increasingly weak macroeconomic context,” Renta 4 warns.
“We continue in a scenario of high inflation without the peak being seen in the coming months, and despite the moderation seen in the United States (pending confirmation of this relaxation trend), in Europe the additional risks due to the gas crisis make it difficult find a ceiling, which is the key to a consistent change in direction of the stock markets (clear floor in inflation, change in the bias of monetary policies, less pressure on the cycle and profits)”, these experts conclude.
Source: Ambito
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