We hope you all feel well at home.
Another week of generalised increases in the world’s stock markets, which are at the highest levels since the lows seen in March, except in the technology sector. We continue to see a large rotation towards the sectors most affected by the Covid-19, all of this caused by the advances in the development of possible vaccines. Meanwhile, restrictions on mobility continue in many countries, which is slightly improving infection figures. The market is once again at very high valuations, discounting higher inflation in the future due to massive injections of liquidity by central banks. However, the large increase in both government and private debt levels has meant less growth and lower inflation in the past. The market is betting that this time it will be different, which does not seem very reasonable. The movement of the stock markets probably reflects a rebalancing of positions in the portfolios of many investors who had not yet believed in the recovery of the stock markets. We expect that the market will continue to maintain a pattern of some volatility, with a lateral movement for the coming months.
Our portfolios continue to maintain a defensive bias, which makes them fall back this week. The movements of these last two weeks have meant the appearance of very good opportunities in different currency pairs. This helps us to have a portfolio that is now very diversified and with very good prospects for expected returns. During the week we have continued to see a revaluation of cyclical currencies, especially the New Zealand dollar, while the dollar has continued to fall and the euro has experienced some strength.
Although portfolios are falling over the month as the movement against some currency pairs continues, the closed profit that we continue to accumulate helps us. Some of these currency pairs are approaching very attractive levels, which coupled with the closed profits makes for a very good opportunity right now, as we have previously mentioned.
We are at your disposal for anything you may need.
This document is provided for informational purposes only and cannot be considered in any case as a contractual element, a recommendation, personalized advice or an offer. Nor can it be considered as a substitute for Key Information Document (KID) or any other mandatory legal information that should be consulted prior to any investment decision. In case of discrepancy, the legal information prevails. All this legal information is available at the offices of Grantia Capital SGIIC, SA and on its website: www.grantiacapital.com