Investing.com - European markets start the week in the green -Ibex 35, CAC 40, DAX...- pending macro data and central banks.
Analysts comment on one issue investors should be aware of: the differences in the performance of US and European stock markets.
"After the first three weeks of the year, the main conclusion we can draw from the performance of the European and US stock markets is that the latter have clearly distanced themselves from the former, showing significant gains at this point in the year, while the latter are all in negative territory," explained Link Securities.
"Thus, driven by technology stocks, especially those directly related to artificial intelligence (AI), both the Dow Jones and the S&P 500, in this case for the first time since January 2022, closed Friday at record highs, once again distancing themselves from the main European indices, which ended the day and the week again with losses," these experts add.
"While some of this decoupling between the equity markets of the two regions can be explained by the greater relative weight of the technology sector in the US indices, we do not believe that this is the only reason. Thus, while the US economy is proving much more resilient to high inflation and high interest rates than initially expected, the main European economies are all either stagnating or about to enter recession, something that will end up being reflected in the results of the companies most exposed to the region, which we understand investors are already starting to discount", emphasise Link Securities.
"In addition, the weakness of China's economy, an economy to which large European companies are much more exposed than US multinationals, helps very little in this regard. All this, we believe, justifies the poorer relative performance of these markets compared to the US. The performance of the region's equity markets will depend to a large extent on how the European economy develops in the coming months," the analysts point out.
"Even if Monday is bullish after Friday's new all-time highs in the S&P 500, DJI30 and Nasdaq-100... beware. The ECB to meet on Thursday. He won't move, but his message will be as hawkish/harsh as Lagarde and Knot (advisor for the Netherlands) were in Davos last week. They will cool the optimistic expectations about rate cuts and that will block the European stock markets", warn Bankinter (BME:BKT).
"We remind you that our expectations for cuts in 2024 are more cautious, considering 4 cuts (100 bp) compared to the 5 discounted by the market (125 bp)", agree Renta 4 (BME:RTA4).
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Translated from Spanish using DeepL.