The end of the third quarter was convulsive both from the economic point of view (greater volatility in the markets, growth data less complacent) and political (problems to approve the Budgets in Spain, Italy defying Brussels with its public accounts). All these factors of greater uncertainty they have penetrated the minds of the citizens, as reflected in the investor confidence survey. This indicator, prepared by JP Morgan Asset Management and published exclusively by EL PAÍS, has accentuated the downward trend falling to the level of 1.3% from 2.49% in the previous quarter. It is the lowest level of the last two years.
The key question to elaborate the index is the one that asks respondents (1,396 in this sample) to indicate how they think the stock market will evolve in the next six months. The group of optimists – are "likely" or "very likely" that the market rises to stand at 31% versus 37.1% of the previous wave. On the other hand, the group of the pessimists is increasingly nourished, representing 20.7% of the responses compared to 16.6% in the second quarter. The group of those who think that the market will remain at six months seen at current levels also increases and accounts for 48.2% of opinions.
Reasons for pessimism
The most pessimistic investors They argue their forecast of additional falls in the stock markets with a series of reasons, among which are the fear of a new financial crisis, "the current political situation", international political instability or signs of a slowdown in the US economy.
One of the questions in the fund manager's survey is what is the market where Spanish savers expect better behavior in the medium term. The responses of the third quarter surge reinforce European equities as the favorite (31% mark it as having the most potential.) The Spanish stock market continues to occupy the second place in preferences (20.1%), although it suffers a setback and those who point to Asian stocks as their favorites (19.1%) are very close.
The greater risk aversion of Spanish savers is also reflected in the answers to the question about what they are looking for when investing. Those who recognize that their main objective is "not to lose money" increase from 40.1% in the second quarter to 41.1% today. For their part, those who indicate that their goal is to achieve "maximum profitability" fall from 28.3% to 25.2%. 33.7% of the respondents explain that what they value most is to sacrifice part of the earnings in exchange for "certain security".
These conservative preferences are reflected in the financial assets that Spanish investors will acquire in the coming months. Although the drop in interest rates leaves the products tied to the bank's liabilities without any brightness, 42.4% of respondents say that they will buy a deposit or open a remunerated savings account. The intention to invest in stocks, fixed income and investment funds falls, and only the intention to invest in pension plans and real estate assets improves. In recent years, the preference for brick has multiplied by five in a context of price recovery. Despite the rebound in inflation, which implies loss of purchasing power, 14.7% of Spanish savers surveyed say they will not invest in anything in the next semester.
The recent stock market declines have not made JP Morgan Asset Management change its strategy. That is, in the US fund manager they still think that the context is still favorable for risk assets. Yes, with nuances. Although they maintain equities as their main bet, they have reduced the overweight in portfolio compared to other investment options.
"We are relatively optimistic," explains Manuel Arroyo, strategy director of the firm for Spain and Portugal. "There are still several quarters for the economic upturn in the US to come to an end," he adds. The manager's thesis is that global growth for next year will remain above 3%, although there is doubt whether that growth will continue to be synchronized as before, or divergences between different economic areas will begin. "It is possible that the gap in monetary policies will be maintained. While the Federal Reserve will raise rates more often in the coming months, in Europe the beginning of monetary normalization will be delayed until well into 2019. "
The recent fall of the stock market is seen by Arroyo as something normal in the final stretch of a long upward cycle. "Volatility returns little by little to historical levels after being away for a long time. In addition, many investors have taken advantage to make profits after the significant accumulated gains, "he says. This expert also recalls that business results are still a good support for the valuation of the shares. "In fixed income we continue to prefer corporate credit. The American public debt begins to have interest, but only for investors in dollars ".