The broker advises moving away from index investment and fine-tuning the selection of securities, both fundamentally and technically.

The broker advises moving away from index investment and fine-tuning the selection of securities, both fundamentally and technically.

The broker advises moving away from index investment and fine-tuning the selection of securities, both fundamentally and technically.

IG analysts are convinced that the stock markets have a year marked by uncertainty and volatility. A scenario in which they believe that the turn to value of portfolios will not be enough to help an Ibex 35 “in a downward trend since 2017”. Instead, they opt for “very selective” positions in stocks such as Telefónica, Repsol and Banco Santander.

One of the most obvious risks facing the equity market in 2022 is a transfer of positions towards fixed income as central banks execute their rate hike plan. For analyst Sergio Ávila, the key will be at the moment when “the return on the bonds is expected to be greater than the stock dividend yield“.

In his opinion, the withdrawal of investment positions in high-risk bond funds is “a canary in the mine” that predicts withdrawals in the bags. However, he considers that the definitive wake-up call will come when the US 30-year bond has suffered a price reduction of 20% against its recent highs, as the treasury a decade later it has already yielded 10% from the same reference.

Withdrawal warnings

This fall in prices, coupled with the rise in profitability of these sovereign papers, is largely explained by the fact that the market has started to estimate “up to seven rate hikes” this year by the US Federal Reserve (Fed). In this way, the consensus already establishes a reference rate for the world’s largest economy of between 1.75% and 2% by the end of 2022.

Given this agile schedule for the withdrawal of stimuli, Ávila considers that “it is possible that there will not be time for the stock markets to stabilize” between one rate increase and another. A scenario that, without a doubt for the expert, could translate into a further “downside pressure” for indices. And this is the main reason why IG advises distance with indexing strategies for the coming months.

oil indices

As if that were not enough, some ‘black swans’ continue to fly over the horizon that could add more trouble to the stock market. From the situation between Ukraine and Russia until a rebound of tensions in the always unstable middle East. And that without forgetting that the US government could proceed to a tax increase for its technology or that the rise in the cost of debt may bankrupt some companies Until now -thanks to the stimulus of the central banks- they had managed to refinance their debt without much difficulty.

With these ingredients, Ávila believes that there will be few traditional indices that give reasons to propose a long-term strategy. A strategy that he only sees as viable in markets that are more dependent on oil and some raw materials, such as Mexico, Canada and Saudi Arabia. In fact, he predicts that instead “it will be a interesting year for him trading Short-term“, especially on the Nasdaq.

As regards the Ibex 35, the IG analyst shows his “skepticism” to a comeback after two years behind its European neighbors. just one comeback above 9,050 points in weekly closings would lead the expert to change his sentiment towards the Spanish reference index.

In terms of sectors, IG sees more potential in banking, oil and gas, basic resources, industrials, real estate and securities with a high cyclical component. A group to which, depending on the evolution of the pandemic, the tourism sector could join, of which Aena Y Amadeus within the Spanish market.

Attention to the ruble

If volatility is expected in the stock markets in the coming months, analyst Diego Morín points out the same for the foreign exchange market. Geopolitical tensions and movements at different speeds by central banks augur turmoil in the forex.

In the case of the euro, the IG expert considers that things could get more complicated for the common currency “if you lose the $1.10“. In addition, it advises closely following the evolution of the Russian ruble for the opportunities it may generate, both because of the situation with Ukraine and because of the country’s leading role as an exporter of energy and agricultural raw materials.

wheat and oil

This is, in turn, one of the reasons why Morín pays attention to the wheat as a bet to consider for this 2022. And it is that Ukraine and Russia add up to a third of world exports of this grain. He also advises closely monitoring the prices of the corn and the oil due to “the scarcity of crops” and the impact of inflation due to the increase in the cost of fertilizers, energy and labor, among others.

As far as energy is concerned, the expert considers that “the barrel of brent oil it could be established above 100 dollars before the first semester” of the year. A perspective of “upward pressures” that seems more accurate than trying to predict what will be the evolution of a natural gas for which he predicts “extreme volatility”.

‘crypto’ regulation

When it comes to cryptocurrencies, IG analysts take a cautious approach due to the impact that the regulation that several economies are developing to obtain greater control over them could have. Furthermore, the predictable dollar appreciation by the movements of the Fed could play against him.

In the short term, they consider that “the challenge for the bitcoin” is to recover the $45,000 per unit. Meanwhile, in the case of ethereumpoint out that the key is to show “strength” in the current price environment with the aim of lassoing the resistance of $3,260.


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