The board of the economic recovery of missing pawns. Although the major central banks have flooded the market with liquidity like never before in the quantity and agility, macroeconomic figures were not sustained and the markets do not change direction. A mismatch that large investors do not hesitate to attribute faults of the political class.
Institutions take time cautioning that the economic recovery loses speed cruise. And the great risk is that this slowdown has become a sudden drop in dry that it will extend tremendously the effects of a pandemic that sent the unemployment only in the united States and in its first month of whip as many citizens as they had found employment since the financial crisis of 2008.
While many of these unemployed persons have managed to return to their jobs or find another occupationthe eternal political rivalries threaten to derail this improvement. Precisely, all lights in the USA there will be no covenant either to release economic stimulus before the presidential election next November 3. Something similar happens in Europe, where the funds of economic reconstruction are still waiting for a plan to put them to work.
The director of strategy, JP Morgan AM for Spain, Lucía Gutiérrez-Mellado, explains it with clarity to the point that there is still time for a fiscal pact in the US “don’t come too late”, but that “it is desirable that you arrive as soon as possible”. And is that every delay puts at stake the survival of a large number of companies and the solvency of many households.
“More now that the return of the containment measures as a last resort viable to contain the epidemic become to cause the closure of whole sectors and drastic reduction in consumption,” says an economist consulted by this portal. And the focus is on the services sector, a key in the majority of developed markets and, especially, in the case of Spain by the weight of the hospitality and tourism.
The chief economist of Lombard Odier, Samy Chaar, is blunt to the point that in order for the economy to reach its now grayed-out potential requires “policies of support constants” that from the part of the budgetary stimulus continue without curdling, reducing the confidence of consumers. Something that the expert has no doubt attributed to factors such as “the inability of republicans and democrats to reach an agreement”.
While markets had been able to “ignore in large measure the growing headlines about the virus, the deceleration of the mobility means weakening economic and that tap the income variable”. So explained Jack Janasiewicz, and Garrett Melson, managers of Natixis, IM, what is happening in the last few weeks on the main trading floors of the world.
In this sense, here are explanation for the recent pullback on Wall Street, which even has diluted the annual earnings that accumulated some of its indexes. The managers attribute this shivering of the american stock exchange to the attempt by investors to guess the in response to what they called “the question of the 500,000 million to us $ 5 trillion”.
This is the fork that of Natixis, IM calculated for the next stimulus package to release in the US. Its ends are defined by the amount of funds that you foresee that could be approved depending on whether, respectively, are imposed on republicans, Donald Trump, or a ‘blue wave’. So-called overturning the election would give the Presidency, the Congress and the Senate to democrats Joe Biden, more favourable to the implementation of public subsidies.
All of these arguments have found a speaker in the mouth of Christine Lagarde, the president of the European Central Bank (ECB). If a few months already urged european politicians to achieve an agreement “without wasting time”, this Thursday did the same for the funds agreed by the European Council to begin to unfold.
The former minister French has urged that “since a licensing agreement is reached, there is that ensure efficiency in the implementation of the funds.” A tone much more forceful than the one that has been allowed to spend the chairman of the US Federal Reserve (Fed), Jerome Powellthat is being closely watched by Trump has complied with dial your own pace and to alter the original mandate of the agency.
The Spanish case
In the opinion of Lagarde, the combination of monetary measures and fiscal it is the only way to ensure “a more rapid recovery, stronger and more uniform”. “It is vital”, he concluded just after you have ensured that in December “re-calibrate” each of the measures at its disposal, as well as its scope.
The plan to rebuild european Next Generation is on the table and in black and white in the papers, but their funds with 750,000 million euros are still not flowing. Brussels has only just now begun to distribute a first package of aid mechanisms for the containment of unemployment from the community mechanism SURE.
And while, in Spain, the doubts multiply. For starters, the Government coalition of the PSOE and United We still have to ensure enough political support to take forward their General State Budget (PGE) for next year. Even purples have hinted that its seamless support is not guaranteed.
To follow, the shadow of doubt falls on the country’s capacity to properly manage the money the community program. And is that to this point has only consumed 34% of the funds that had been endowed to the country for the period 2014-2020.