Invesco anticipates that the Spanish stock market will prolong its upward phase, supported by the good momentum of banking and energy companies, in an environment defined by rising interest rates and a greater volume of investments linked to electrification.
In a meeting with journalists to detail its forecasts for the second half of the year, the manager stressed that "Spain is growing above the European average" and that this behavior favors the evolution of the markets.
Invesco's Head of Active Distribution in Iberia, Fernando Fernández-Bravo, highlighted that "The 'Next Generation' funds are helping 'utilities' towards that electrification change for electric cars, data centers or decarbonization."
In this regard, he remarked that the large national electricity companies are "very diversified," something he considers especially relevant after the crisis in the Strait of Hormuz evidenced the importance of diversifying energy sources.
Regarding the financial sector, Invesco insisted that "it is a good time" to position oneself in Spanish banking, backed by interest rates at 2.25% in Europe and by the geographical diversification of its businesses outside the domestic market.
POSITIVE EVOLUTION OF EMERGING MARKETS
In its global strategy, Invesco maintains a bet on emerging market equities, trusting in the potential they could capture if the dollar weakens in the coming months. Fernández-Bravo recalled that "The American stock market has done very well, mainly due to artificial intelligence, but we believe that other geographical areas can do just as well."
Despite the recent rebound of the US currency, the firm maintains its vision by considering that many investors could unwind dollar positions if in the coming years "they are not so overweight in the United States" and because "the 'Trump effect' makes the American bond not a safe haven asset."
In recent months, South Korea and Taiwan have been among the markets most favored by the strong rise of semiconductor and hardware companies, as well as by the increase in their exports destined for data centers.
Even so, the asset manager maintains an underweight position in both countries. "We have started to reduce a bit because exports are doubling and tripling their level of recent years. We believe that this is not sustainable in the short term, we are seeing these types of companies as a bit expensive," said Fernández-Bravo.
Regarding artificial intelligence, the firm prefers to wait to see how its profitability materializes. Therefore, they opt to position themselves "a little more negatively" in software and reinforce their exposure to semiconductor manufacturers, relying on the order book for the next two years, as well as infrastructure for data centers, raw materials —due to the need for copper and rare earths for chips— and the energy sector.
"VERY STRONG" MARKET
At Invesco, they consider that "the market is very strong," with a notable capacity to absorb geopolitical tensions and react constructively, which should favor an "economic reacceleration" once the situation in the Strait of Hormuz normalizes. "Demand is still present and this is leading companies to have good results," explained the senior director of ETFs for Iberia & Latam of the asset manager, Macarena Velasco.
Once traffic through the Strait of Hormuz returns to normal, the firm expects the cycle of interest rate cuts to resume towards the end of 2026 and the beginning of 2027.
"We see no reason for central banks to need to raise rates," Velasco pointed out, except in Japan, where a greater tightening of monetary policy is considered reasonable. In any case, she specified that they would review their forecasts if they detected "a peak in inflation."
Invesco is managing a scenario of gradual reopening of the Strait of Hormuz during the third quarter of the year and a certain normalization towards the end of the fiscal year. If this forecast is not met and there is an escalation of the conflict between the United States and Iran, the entity considers among its risks that the price of crude oil could skyrocket to $150, which would damage European, emerging, and Japanese fixed income and equities, while the US stock market "would do better with a strengthened dollar."
Another risk the manager is considering is that artificial intelligence may not generate the expected revenue. In that scenario, there would be a setback for the so-called 'Magnificent Seven' in the stock market, a weakening of the dollar, and a relatively better performance of European, emerging, and Japanese equities compared to the US market.