Keys to winning on the Stock Exchange in a high-voltage November

The volatile November market will be tested by several factors, including the Iranian conflict, U.S. and Spanish elections, inflation, Nvidia's results, and Anthropic's stock market debut. Historically, November is the most bullish month for the Ibex, with a median 2.31% price increase since its creation in 1992. However, the year's final push is expected to be turbulent.

Factors such as U.S. mid-term elections, geopolitical uncertainty surrounding Iran, French budgetary concerns, Nvidia's November 17 stock results, and Spain's general elections on the 29th will all influence investor appetite for risk. Inflation and U.S. employment data will also play a decisive role in predicting future interest rate movements.

The political landscape in the U.S. will impact sector preferences, as election policies shape investor preferences. Additionally, the potential Iran agreement confirmed by the stock exchanges (see page 18) must be monitored. Although the market is fraught with risks, analysts foresee a recovery in stock prices during the year's final stretch.

Nicolás López, Singular Bank's variable income analysis director, believes the market "could regain its positive tone between November and December" based on continuous corporate profit growth and the stabilization of interest rate expectations and sovereign debt curves.

If this scenario holds true, technology, industry, and financial services could lead the market's advance. However, the path will not be linear. César Sánchez-Grande, co-director of Renta 4 analysis, warns that while November and December are typically favorable months for the variable income market, the year's direction will depend on resolving numerous upcoming events.

One focal point of concern is artificial intelligence investments, with doubts about the time needed to see returns from substantial infrastructure expenditures negatively impacting tech giants like Amazon, Meta, Alphabet, and Microsoft. Extending this uncertainty to other companies could have broader market implications.

Despite these concerns, López views the tech companies' adjustment as the final phase of corrective action. He expects a potential relevant market floor and the resumption of an uptrend. Corporate profit growth is expected to continue in the upcoming quarters. If the market rebounds, technology, industry, and finance could again lead the rally.

Nvidia, a key reference for assessing this trend, is set to release results on November 17, with investors scrutinizing its forecasts, margins, and the impact of trade restrictions. These figures will help determine if the AI sector's infrastructure spending remains strong, supporting sector expectations. Other potential leaders in this rally include Apple, which may offer an attractive profile given its low exposure to mass investment infrastructure spending and strong cash generation capabilities.

In industry, Singular Bank identifies aerospace and defense opportunities, as well as companies involved in electrification like Siemens and Schneider Electric. Analyst Ignacio Cantos of Abante expects European banks to outperform insurers if the market improves, as banks have been among the weakest sectors in recent European sessions.

Banco Sabadell's Glen Chapman believes Spanish banks could lead a rebound if French risk premiums and geopolitical uncertainty ease, as seen earlier. The upcoming elections on November 29 will be crucial, with XTB emphasizing the importance of establishing a stable government and announcing initial economic priorities. Renta 4 believes the electoral impact will likely be concentrated in the first days.