Slightly positive tone on this changing month for most asset. After suffering the Greek problem for weeks and turmoil in China, which in one session came to fall by 8%, it appears that the markets also begin to be on vacation. Historically during the month of August, the volume of trading on the Spanish stock market lowers by half on avarege. That means that nearly 60% of the months of August have been bearish.
Last Monday it was reopened the Athens Stock Exchange with spectacular falls of 20%, a figure that should not be surprising after so many closed days. And that shows us once again that it is better to quote the bad news daily than freeze it for a period of time. Beyond that, they are still negotiating the details of the third Greek bailout despite harmful thesis background German Finance Minister, Mr Schauble, who defends a temporary exit from the euro for Greece. Really? …. we took it as a joke or if he means it, it means that this man is thought that the rest are fools. A temporary Greek exit from the euro is not viable, if not out and re-enter the eurozone. A notable aspect of the fall of the Greek stock market in its reopening, is not contagious to other European and global indices intensely. And reading this fact is negative for Greece, since lost that powerful lever that was to affect other markets and improve their negotiating position.
In the United States the GDP data for the second quarter it was positive as we anticipated a 2.3% and thus exceeds the soft patch in the first quarter. We want to emphasize here the improvement of domestic consumption component is strengthened, GDP and that is vital for the United States as its growth based on domestic demand. The Fed kept its policy interest rates unchanged in the light of developments in the labor market and inflation rate increases will be closer to end of the year or closer to return from vacation. In China it seems that the market storm has passed but we have to follow very closely as they continue unlisted most companies were suspended from trading before the intense ride. This Friday we will have the data of Chinese trade balance, and at first not too positive data are expected in this economy.
As one of the markets that we usually discuss shortly, the raw materials, we have seen in recent years its evolution has placed it as the active worst consecutively in 2011 (-13.3%), in 2012 (-1.1% ), in 2013 (-9.5%) and 2014 (-17%) and thus whether improvements of GDP for the world economy are confirmed and although slowly but progressively they recover activity levels could start making some selective investment in this market. The multiples are very low. Bonds in general have slowed rally rates and falls in price, it seems that calm has returned to this asset after a very negative weeks. The QE is still there but no longer in the center of the huricane. In short, we continue with the same strategy ahead of August, not increase the risk but not unwind positions if not done before Greek setback, we need to know more macro details, especially the rate hike by the Fed to gradually modify or maintaining our current asset allocation. Looking ahead to the coming months the fundamental question that should have a clear answer is whether Europe, or rather Mr Schauble Germany in the lead, they believe in the process of European integration or not. In light of the attitude of the German finance minister, many doubts came up to our minds. It is difficutl to understand what should be set at as Adenauer, statesman who offered no doubts about the proposed union and European integration is failling to provide reasonable conclusions.