Take 5 and come back tomorrow

First of all, let’s be clear. The following is not investment research/advice.?And, as such, it involves no investment recommendations. These are my thoughts on Spanish equity issues, which I find relevant. I share them freely (and not just as regards price). As always, I am only trying to help. Please read the rest of the “discomplainer (*)” at the end of the article.

Market environment: It’s about someone’s interest (Asia-Pacific markets rose and European and US futures rose) – Asia-Pacific markers rose on interest rate hopes. Futures for Europe and the US rose.

Response to the crisis: If you give me some money, I’ll be forever in your debt - (Spain passes the EU test on the use of aid and sees €6bn unblocked (Expansion Sat p23) – Spain “passing the test” and getting more money to spend is a short-term positive. It will help GDP growth. And help the Government in an electoral year. But the larger question is whether this helps long-term growth (the goal of the Next Generation funds), because in the end the money will have to be repaid.

Government debt: Debt is debt - (Government debt rises €75bn in 2022 and closes at 113.1% of GDP (Expansion Sat p25)) – Other than European funds, one of the pillars of growth in recent times has been deficit spending funded by higher debt (partly due to the suspension of EC limits). Going on a credit card financed binge can feel good. And buying a nice suit may get you a better reception at the bank. But debts are what they are.

Acciona: Inn for a penny, inn for a pound - (Increases its stake in Nordex by capitalizing its debt (Expansion Sat p10)) – Acciona had already a debt exposure to an industry that was under pressure due to higher costs (see Siemens-Gamesa). Might as well go all in.

Macro: Living at home - (House purchases fall 10.2% YoY in December (National Statistics Institute)) – House purchases declining do not tell a good story. New home purchases (-18.8% YoY) tell an even worse one.?If developers are not able to transfer higher costs to prices this points to demand weaking. So, Spaniards will have to live with mom for a little longer.

*The above information has been read/understood/summarised/evaluated/copied as well as I could to provide a guide to Spanish equities, given available timing/intellectual constraints, and I accept no liability for misreading and/or mistranslating the original copy as set out in my previous article (which I urge you to check, as I am only trying to point you in the right direction, I hope). As for what you may decide to do, after reading the above, please contact your legally approved provider of investment advice on Spanish equities.?