Tuesday, January 18

Ómicron puts the bags within shopping range

Investors face the latest trading sessions with mixed sentiment. The rapid expansion of the omicron variant led to undo positions in the stock markets due to the possibility of new restrictions.

However, this can be positive as they can now take advantage of these declines to take positions.

This idea is defended by a report by Fundstrat Global Advisors after seeing how, due to omicron, the main world indices have lost important levels.

“Monday’s breakout of 4,600 points on the S&P has turned out to be the biggest deterioration in the short term, but it also suggests that additional selling is expected for the index before any lows later this week,” wrote Fundstrat’s Mark Newton.

Equity options

These fixes create a good opportunity at a time when analysts recommend positioning in equities for next year, since it allows you to buy shares at a discount.

Pimco reiterates that “we continue to show an optimistic stance in the equity market, and we favor companies with long-term disruptive capabilities (through technological and sustainable initiatives).”

Precisely, Pictet AM expects returns of 5 to 10 percent in equities globally by 2022, with strong 15 percent growth in corporate earnings, roughly double the consensus forecast, more than offsetting a 10 percent contraction in expected prices / earnings and continued trickle of dividends.

On the other hand, Pictet analysts estimate that the United States Treasury bonds, which set the trend in fixed income, register losses for the year, although their yield to maturity will hardly exceed 2 percent.

“It must be taken into account that the magnitude of the increase in interest rates will be mitigated by the fact that the Federal Reserve and other central banks, rather than strictly monitoring inflation, remain concerned about maintaining growth and employment,” they say. from Pictet.

How Much Can An Investor Buying With Dips Earn?

How much can the investor who buys with falls earn? GVC Gaesco indicates that at the level of absolute valuations there is potential for growth in the medium and long term of 20.9 percent for the IBEX 35, 16.7 percent for the Euro Stoxx 50, and 9.8 percent for the S&P 500.

All this, despite the appearance of new variants of Covid-19, with an increasingly vaccinated world population and with less global mortality.

Attentive to global growth

The evolution of the world economy will be key in the evolution of the stock markets. On Monday, a revision of the growth forecasts of the The United States, faced with the impossibility of carrying out the BBB of Joe Biden, weighed down the markets.

In this sense, Gilles Moëc, chief economist at AXA IM, and Chris Iggo, CIO of the manager, explain that “the appearance of the omicron variant forces us to consider a downside risk in our central scenario for 2022.”

For Moëc “the combination of a high speed of spread of the variant and a still significant number of people without any protection may mean that additional restrictive measures will be necessary in the coming weeks to preserve health care capacity”.

And he warns: “This would take a toll on GDP growth this winter, although it would probably be a mere pause in the recovery trajectory. We have not returned to the starting box in the fight against the pandemic.”


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