“European banks can continue to do well on the stock market”

JP Morgan AM summarizes this fiscal year 2025 as a “good year for financial markets.” With world stock markets at historic highs, the group’s strategy director for Spain and Portugal, Lucía Gutiérrez-Melladoconsiders that the banking sector still has room to rise. “The sector has suffered greatly after the 2008 financial crisis, but continues to have good fundamentals and has solid balance sheets despite the fact that Interest rates have been at low levels for years. This leads us to think that they can continue doing well,” he explained.

In this context, he defends that Europe can be the most profitable market in the short term along with the emerging economies, with a profitability of 8.5% and 7.2% annualized, respectively, projections well above the United States, for which they predict 6.7%. From the North American manager They describe this exercise as “extraordinary” despite the tariff war declared by Donald Trump on the rest of the world and the uncertainty it has generated. With the focus on this third quarter, Gutiérrez-Mellado has Chinese technology index highlightedwhich has been one of the best performers in the quarter, as well as Japan, given that the weakness of the yen has benefited exports.

Although it considers that Europe has fallen somewhat behind, the outlook is positive after the European Central Bank (ECB) the down cycle has concluded. “It doesn’t make as much sense to skew portfolios toward USA“he added, after doubting whether the North American market will be able to maintain the speed of recent years, marked by the pull of the ‘Magnificent Seven’.

The forecasts of JP Morgan AM around the US economy are going through a slowdown this year to begin to recover in 2026 in the heat of the movements of the fiscal plan, which is boosting consumption, and the Federal Reserve on monetary policy. Its central scenario contemplates two more cuts until the end of the year after starting the cuts a month ago, while for the next one everything will depend on the evolution of the economy, “which is holding up well to the tariffs.”

Regarding the earnings season corresponding to the third quarter, which started this week with the large North American banks, Gutiérrez-Mellado warns that it may not be so “spectacular”. So far, JP Morgan, Goldman Sachs, Citigroup and Wells Fargo have exceeded expectations. In these circumstances, it is advisable to be selective. “Not all assets are going to behave the same in this environment,” he stressed.

The stock market rally combined with increased geopolitical uncertainty On a global scale, it has led raw materials such as gold to trade at record levels after an ounce has exceeded $4,200, a situation in which it recommends having an alternative approach with little weight in portfolios. On the other hand, the manager of the largest bank in the United States maintains its strategy of overweighting equities compared to fixed income, in which they have reduced their exposure to credit and have maintained duration in case there is any negative surprise with the macroeconomic data.