what factors affect stock market prices?

The volatility on the stock markets produces some alarm among investors who are speculating about the causes of the falls. Many clients have called us and expressed typical concerns regarding these events. Hence, in the Markets Department at BBVA in Switzerland we feel it would be interesting to explain what factors affect stock market prices.

Treasury inflation-protected securities (TIPS) vs. traditional sovereign bonds

In this survey we shall try to identify the main differences between traditional sovereign bonds and Treasury inflation-protected securities (or TIPS), and to do so we shall focus on the US market, although the conclusions may be extrapolated to other key markets such as Germany, the UK, etc.

How emotions affect investment decisions?

Our emotions influence our decisions. It is vital therefore that we analyse how emotions impact investment decisions, and according to our investor advice and the favourable market indicators, we can reach success when investing.

Investing in art: the traditional advice

BBVA offers its private banking clients access to the best art advisory service in the world, to help them develop their taste and passion within the most promising sectors of the art market. But, what does art advisory really entail?

Positive indicators for 2018

Joaquín García Huerga, Global Strategy Director from BBVA Asset Management, pick out from their management their forecast for economies and markets at 2018.

A world with clean energy

Different opinions exist regarding the causes of climate change: Some experts state that temperature increases are a normal part of the Earth’s cycle, whilst others interpret this phenomenon as man’s doing.

Great moment for the global growth

Jorge Sicilia, Chief Economist of BBVA Group and Managing Director of BBVA Research, explains the keys why global growth stands at its greatest moment since the last ten years and provides a regional forecast.

Demographic growth, key factor for inflation

The authorities, the various institutions and investors are surprised and wonder what is causing inflation in developed countries has remained at all-time lows since the outbreak of the crisis in 2008.

Economic fragility despite of positive figures

Most of the developed countries continue publishing positive macroeconomic figures and those reflecting growth and economic activity in particular. This could have an important effect on the trend in global financial asset prices.

Copper: world economy expansion

In the decision of whether to invest in gold or in copper, there are two very different underlying views of the future of the world economy.

Dots, points that plot our destiny

Despite Janet Yellen, the chair of the US Federal Reserve, is the most influential component in said organisation, we should never forget that she is not alone and there are other members whose vote, and often whose opinion, are equally important.

The expected trend in benchmark rates

At the end of 2015, the US Federal Reserve began official rate hikes at a much slower pace than on other occasions and with no apparent reasons for doing so, because neither inflation nor economic growth had passed thresholds for concern.

Classic Cars, An Exquisite Investment (I)

At some time in our lives, we have most certainly stopped in the street to take a serious look at a car that for some reason has caught our eye. It is often a colour, a design or simply the person driving it, which whisks us off to that imaginary world where we dream we are driving that same car or we at least have one parked in our garage.

Swiss Vineyards, white gold amid the mountains

When people think of Switzerland, its best known features are its chocolate, skiing, private banking and watches. What is not quite so usual, however, is to associate it with wine production.

Wages and salaries, consumption’s indicators

Bearing in mind that consumer confidence in the USA has shot up over recent years (to even stand above the levels prior to the start of the 2008 crisis), it gives every indication that worker remuneration in the world’s biggest economy is going to start rising strongly over the coming quarters.

The effects of monetary policy on the Eurozone

The appearance of European Central Bank President Mario Draghi on Thursday 20 July last, when he was expected to give details of a possible turnaround in the central bank’s current monetary policy, eventually had little repercussion.

The euro pressure against dollar

The latest remarks by ECB president Mario Draghi do nothing but confirm that Europe’s highest monetary institution is in no hurry to raise interest rates from their current –0.4%. On the other side of the Atlantic, alternatively, the discourse from the US Federal Reserve is indicating at least one further rate hike in 2017, thus accumulating four increases in 18 months. Such an outstanding difference makes the dollar more attractive than the euro in the medium term.

Investing in summer: A threat or an opportunity?

One of the frequent sayings on the stock markets is sell in May and go away, in allusion to the volatility on the equity markets in the summer period, a situation that begs us to ask if, in this period, the markets could undergo some kind of turbulence or volatility.

Inflation and oil, the thin black line

After the crisis that broke out in the USA in 2008, central banks acquired an even more prominent role than they already had to keep their battered economies afloat. With interest rates at all-time lows, the major economies had to resort to non-conventional measures and put debt-purchasing programmes under way, those known as QE (Quantitative Easing).

The US stock markets break their all-time high records

In July, the S&P 500, which represents the capitalisation of the largest US corporations, reached all-time highs in North American stock markets, accumulating important yields in recent years.

What are the keystones of gold prices?

Gold prices depend largely on the trend in real interest rates in the USA, i.e. nominal rates minus inflation. The graph compares gold (blue) with the real 5-year interest rate in the USA (orange, on an inverted scale). The lower the real interest rate, the higher the price of gold.

Brexit’s uncertain future

The latest elections held in the United Kingdom on 8 June last have revealed a scenario of political uncertainty in the country, aggravated by recent outbreaks of social unrest suffered in Manchester and London, which have weakened Britain’s interests in its political aspirations vis-à-vis the negotiation of the future of the Brexit with the European Union.

How does the monetary politics affect our portfolios?

Draghi’s statements at the end of June indicating that reflationary forces (higher nominal growth and inflation) were replacing the deflationary fears of previous quarters, had a swift impact on the financial markets, producing sharp increases in long-term interest rates and a subsequent fall in bond prices across almost all the geographic regions.

The power of diversification

On 6 June last, the Spanish entity Banco Popular was sold for one euro. The increasing withdrawals of deposits had created an unbridgeable liquidity gap. The European authorities gave the go ahead to the sale of Banco Popular, which marked the disappearance of the entity with the highest efficiency ratio in Spain.

The ISM, an indicator auguring an optimistic future

Despite the volatility and uncertainty reported worldwide in the first three months of the year, the major leading indicator, the US manufacturing index (ISM) is indicating that this country is going to undergo an improvement in its economy over the coming quarters.

The world stock market hits new all-time highs

The intense momentum or positive inertia on the financial markets today has catapulted world equity indices to new all-time highs, particularly highlighting the monthly performance both by countries in Europe, driven by the election results in France and those more closely tied to the emerging economies.