Latest news:

“The market doesn’t like to be reminded that COVID-19 is still with us”

Dec 1, 2021

Redacción Mapfre

After a few weeks during which the market seemed calm and steady, its volatility has returned, and the reason for this is one that has now become familiar: the pandemic. “The market doesn’t like to be reminded that COVID‑19 is still with us”, says Daniel Sancho, investment manager at MAPFRE Gestión Patrimonial, appearing on the weekly “Ponte en Acción” (“Take Action”) talk show on Negocios TV. “We’ve already had weeks of high uncertainty, but it seems like it took some time for the market to become convinced of this”, he explains.

Investors now see the end of the year approaching quickly, with a variety of factors in place that could upset the rally in the markets that is typically seen during this period. In addition to the new variant, an increasing number of experts believe that inflation will be more persistent than temporary (in the eurozone, it rose to a record 4.9% in November). “It can be stressful just trying to keep up with what the market is doing each day, because sometimes what’s happening is hard to understand. When these episodes of volatility are occurring, there is always a need to reassure the clients, reminding them that investing in equities requires a five‑year outlook, or even longer”, Sancho points out. “When the market is behaving in the way it has been recently, managers need to tune out the day-to-day noise and look for long-term opportunities”, he adds.

As a result of all this, in the United States a correction has occurred to the yield curve for all maturities. As an example, Sancho says that in the near term “the market is no longer expecting a rate hike by the Fed, or at least expecting that it will happen later”.

Click here to watch the full interview (spanish version)

High volatility in stock markets: why it happens and how to act

In recent weeks, international markets have faced their most challenging period since 2020. In a situation marked by surging volatility, emotions like fear take center stage in the minds of many investors, and market movements shift from linear to exponential. Such situations, although not frequent, do tend to recur periodically, and it’s important not to get swept up in the negative atmosphere or act impulsively with a short-term mindset, as the experts at MAPFRE remind us.

The dollar's hegemony under scrutiny

The US dollar’s role as the world’s reserve currency, historically underpinned by institutional credibility, financial depth, and trade dominance, is now facing mounting structural challenges that go beyond short-term economic fluctuations.

The tariff war shakes the global economy and casts doubt on U.S. debt

The tariffs are a problem that’s marking a major shift in the economic relationships we've built and developed over the past few decades. The U.S. President is using them as a tool to bring manufacturing back home and, in turn, boost government revenue through both direct and indirect taxation. But the ends don't always justify the means, and in pursuing these goals, the U.S. is now facing slower economic growth and rising inflation.