Spanish equity markets look attractive notwithstanding inconclusive election results and slowing growth

The November 10 elections did not solve the political deadlock in Spain, suggesting ongoing political uncertainty. Most importantly, a passing of a 2020 budget looks unlikely. Further fiscal consolidation will depend mainly on growth and falling interest rate expenditures.

Highlights:

  • The November 10 elections did not solve the political deadlock in Spain, suggesting ongoing political uncertainty.
  • Most importantly, a passing of a 2020 budget looks unlikely. Further fiscal consolidation will depend mainly on growth and falling interest rate expenditures.
  • The Spanish economy is set to slow but will still outperform the euro area average.
  • With respect to financial markets we detect value in Spanish equities. They are relatively undervalued and the price earnings differential versus the EMU index looks extreme.

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SPANISH EQUITY MARKETS
LOOK ATTRACTIVE
NOTWITHSTANDING
INCONCLUSIVE ELECTION
RESULTS AND LOWING
GROWTH

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