Corporate earnings have surprised many analysts and investors in recent days, who were expecting worse figures, and everything points to this trend continuing in the coming months. However, there is significant divergence between the numbers being presented and the much weaker macroeconomic scenario says Alberto Matellán, chief economist at MAPFRE Inversión, part of MAPFRE, the largest insurance group in Spain and Latin America.

"These positive results don’t line up with the macro picture. They’re good, but we have to look down the line at what’s going to happen in the future and not focus just on net income. Specifically, we need to moderate expectations for the tech sector and diversify a little: these companies have already risen a lot, and although they’ll continue to contribute in the long-term, we should always maintain a diversified portfolio," says Alberto Matellán, chief economist at MAPFRE Inversión.

The banks are the first to present earnings in Spain and will be releasing their numbers in line with an expected margin contraction for the coming months. Good bank earnings depend on interest rates and economic strength, and more specifically, on default rates, so management “can see it coming” and act accordingly, according to Matellán.

"There will be a narrowing of margins, but it shouldn’t be excessively tight. The great advantage of classic banking business is that any contraction in margin is visible, and management know the signs well and know how to position themselves and either tighten financing conditions or rebalance revenues through commissions," he said.

Beyond the results, investors are still paying close attention to central banks. At the moment, there’s nothing to justify any surprises or change in tone at the US Federal Reserve (Fed) or the European Central Bank (ECB) when macroeconomics “is the same as it was a few weeks ago.”

Matellán rules out an aggressive lowering of rates in the United States. "Perhaps the market isn’t fully aligned with the Fed. In recent weeks, we’ve seen something of a correction, but it’s still not aligned," he explained. In Europe, on the other hand, investors have relaxed their expectations of lower rates after the publication of the latest macro data and the messaging from ECB president, Christine Lagarde.

What would happen in the markets if Trump wins again? he further asked.

The United States is one of the more than 70 countries that will hold elections this year, and former president Donald Trump looks set to be the GOP candidate once again. Matellán insists that, at the moment, nothing is known about the economic policy that Trump would apply if he were to occupy 1600 Pennsylvania Avenue again.

“If very different policy is implemented, it would take some time for them to be rolled out and take effect,” he said. He also recalled that political changes don’t usually lead to very big changes in the markets unless they are very extreme, although the noise surrounding them can translate into volatility.