The working hypothesis that the stock market would open the new year with a lateral movement of the indices is confirmed for the US stock market while the European markets have so far logged a decidedly positive trend. The recovery of stock prices of the Old Continent finds its principal explanation in the marked correction noted during the last part of the year following the electoral victory in the US presidential elections of the Republican candidate.<\/p>\n\n\n\n
The interest of stock market participants in correcting the imbalance of valuations on opposite sides of the Atlantic, derives from a contingent problem that can no longer be postponed by European authorities, constituted by the third consecutive quarter of technical contraction of the German economy, once the locomotive of Europe. Paradoxically, the real push to act on the part of Brussels and Berlin was received from the surprising activism of President Trump, who in a few days from his inauguration began to implement his electoral program, starting with the implementation of the tariffs so feared by Europe and beyond. At this point the ECB had to declare that it would further reduce the cost of money to support the economy; at the end of January a conference was urgently called to implement concrete measures to support the automotive sector, the primary root of the recession, and the electoral campaign for the formation of a new German government saw the issues of ecological sustainability put on the back burner in favor of greater pragmatism in terms of economic concreteness. <\/p>\n\n\n\n
The result of the polls leaves no room for doubt, the green utopia for the moment takes a back seat and the priority becomes the recovery of satisfactory economic growth. Therefore, it is not surprising that the sectors that have stood out most in the stock market at the beginning of the year are those of durable goods, such as automotive, industrial cyclicals, basic chemicals, the latter sectors also having a favorable impact on a very recent geopolitical development, always linked to the activism of the US President. In fact, one of his electoral warhorses has always been the statement that, if he had been in power, the war in Ukraine would never have broken out and that, if elected, he would have ended it in a few weeks. The recent stalemate between the two presidents due to differences of opinion on the timing and methods to achieve the goal of ending the conflict unlocks unexpected possibilities for European diplomacy to get back into the game after having lost this opportunity due to its prolonged inaction. The reaction of the stock markets in the short term could translate into greater volatility, but the belief that we are close to a solution to this tragic war should not diminish, offering growth potential for all those sectors that in the medium term will be involved in the massive reconstruction program of the country. Returning to the opening theme, the current lateral movement of the indices increasingly appears to be a phase of accumulation rather than distribution, given the small number of technical corrections that have occurred since the beginning of the year. Even on the US fixed income front, a totally unexpected eventuality is looming, linked to the declaration by the new Treasury Secretary, Scott Bessent, of his intention to monetize, in the next 12 months, part of the federal assets for the benefit of the American people. This would involve the revaluation of gold reserves, bringing the price of an ounce from 42 dollars in October 1971 to the current 2860. The prospective benefit of this measure on the budget, quantifiable at around 700 billion dollars, explains the drop in ten-year yields from 4.65% to the current 4.25%.<\/p>\n\n\n\n
Nicola Bravetti<\/em> Data Source: Bloomberg<\/em><\/p>\n\n\n\n \u201cThis report cannot \u2013 nor can \u2013 be consider a solicitation to invest in financial instruments.\u201d<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":" The working hypothesis that the stock market would open the new year with a lateral movement of the indices is confirmed for the US stock market while the European markets have so far logged a decidedly positive trend.<\/p>\n","protected":false},"author":1,"featured_media":5828,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,43],"tags":[17,26,15,16,18],"class_list":["post-5869","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markobs","category-observer-2025","tag-bravoadvisory","tag-lugano","tag-market","tag-observer","tag-switzerland"],"_links":{"self":[{"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/posts\/5869","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5869"}],"version-history":[{"count":1,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/posts\/5869\/revisions"}],"predecessor-version":[{"id":5870,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/posts\/5869\/revisions\/5870"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/media\/5828"}],"wp:attachment":[{"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5869"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5869"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5869"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}