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.
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.
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.
BBVA Global Wealth held the seventh edition of its ‘Next Generation’ Madrid program, intended for second generations of Private Banking customers. The purpose of the program is to bring value to customers’ families, providing them with a specific educational experience.
2017 has been the year of cryptocurrencies: More than 300 new virtual currencies have been created. Bringing their total to over 900. In other words, the number of virtual currencies in the world more than triples the number of conventional, state-issued currencies, which according to the UN currently stand at 180.
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.
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.
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.
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.
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).
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.
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.
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.