Economy
“Uneven Growth and Fiscal Shadows Amid Geopolitical Turbulence”
- The global economy remains characterized by strong regional divergence. The U.S. continues to show economic growth as of Q2 2025 (+3.0% year-on-year), albeit at the expense of fiscal deterioration, with employment and consumption data showing signs of cooling. The Eurozone remains stagnant (+0.7%).
- Inflation continues to moderate on a year-on-year basis, although persistent pressures in energy and food prices are prompting caution among central banks.
- At Jackson Hole, Jerome Powell adopted a more dovish tone, suggesting that the Fed may pivot its monetary policy stance in the short to medium term, while warning of risks to its independence.
- The Fed maintains interest rates between 4.25%–4.50%, while the ECB holds rates at 2.00%, with a cautious outlook in response to weakening demand.
Markets
Contained Volatility and Adjustment of Expectations
- August ended with mild corrections following a strong rally in July, driven by profit-taking and ongoing geopolitical uncertainty.
- The U.S. dollar has regained stability after previous weakness. The EUR/USD exchange rate closed August at 1.17, with a short-term sideways trend.
- Fixed income remains sensitive to fiscal noise in the U.S., with some pressure on the long end of the Treasury curve. In Europe, sovereign bonds are showing relatively better performance.
- Brent crude oil remains stable around USD 70/barrel, following months of high volatility.
- Equity indices continue to consolidate gains in USD terms, with more moderate returns when measured in euros: the MSCI World in EUR closed August at +1.8% YTD, the EuroStoxx at +8.8% (driven by strong performance in the banking sector), and the S&P 500 (in euros) at -1.2%.
- U.S. technology continues to lead the market, supported by strong momentum in artificial intelligence and robust earnings expectations.
Investment Policy
Prudence and Focus on Financial Quality
- The current environment calls for a disciplined and selective strategy, emphasizing high-quality assets, strong balance sheets, and earnings visibility.
- Exposure is being increased in sectors with strong relative momentum, particularly technology and defensive consumer goods.
- A neutral stance is maintained on the U.S., with a slight overweight in Europe, where valuations offer a greater margin of safety.
- Active risk management remains key: close monitoring of core inflation trends and fiscal decisions in the U.S. is essential, as these could impact market stability.
- In this context, tactical patience (operating with a liquidity buffer) and asset quality become the main tools for capital preservation and value capture.
LEGAL CONSIDERATIONS
1) The present information is for advertising and informational purposes only. It is not and cannot be considered investment advice or legal opinion, nor is it intended to replace the necessary advice in this matter and does not constitute an offer to sell or a solicitation of an offer to buy.
2) All opinions and estimates provided are based on sources considered reliable. However, EDM Gestión, SAU, SGIIC cannot guarantee that they are accurate or complete and assumes no responsibility for any loss, direct or indirect, that may result from the use of the information provided in this document.
3) EDM Gestión, SAU, SGIIC warns that past performance is not a reliable indicator of future performance.
4) EDM Gestión, S.A.U SGIIC is a Spanish public limited company registered in the Special Register of Collective Investment Institution Management Companies of the CNMV with number 49 and registered in the Madrid Mercantile Registry, in volume 36,739, folio 52, sheet M-658.326 and CIF: A-58.217.175. Its activity includes, among others, the representation, management, and administration of Spanish-domiciled and legislated Investment Funds and Companies, and the discretionary management of portfolios.
