Cultural Globalisation: Between Fusion and the Preservation of Identities
July 30, 2024
The Topic of the Week:
Globalisation is a recurrent term in our conversations, but we rarely stop to reflect on its impact on the culture of countries and, therefore, on the lives of citizens. Cultural globalisation can be understood as the result of a set of measures that seek the continuous development of society, merging diverse cultural traditions, whether in gastronomy, music, sport, fashion, knowledge, economic, technological, health and other developments. This fusion or rapprochement of cultures has allowed for a significant increase in international relations.
One of the factors that have directly influenced cultural globalisation is the constitution of economic blocs, such as the European Union, which seek to strengthen capital and unify currencies, or commercial blocs that allow the free crossing of borders, facilitating direct cultural exchanges. Moreover, we cannot forget the crucial role of the media and telecommunications networks, which have shortened distances and brought us closer than ever before.
Cultural globalisation has many positive aspects. It allows us to learn about different world views, to empathise with other cultures and to expand our markets, which in turn boosts the economy. It also facilitates the learning of common languages, such as English or Spanish, and in general, promotes a rapprochement that enriches us as individuals and as a society. This cultural openness gives us the opportunity to grow and evolve, mastering more aspects of life.
However, cultural globalisation is not without its drawbacks. One significant risk is the possible loss of local customs in favour of less deeply rooted ones, such as the substitution of Halloween for All Saints’ Day in some cultures. In addition, globalisation may lead to increased competition, generating wage deflation and loss of local competitiveness in certain countries. Consumers, on the other hand, become more demanding, which can put a strain on local economies.
Characters such as Shakespeare, whose works such as ‘Romeo and Juliet’ and ‘Hamlet’ have been retold and adapted over time, and J.K. Rowling, author of the Harry Potter saga, whose books have been translated and loved around the world, illustrate how culture can transcend borders. The Bible, with its teachings and values translated into countless languages and adapted by people of different religions, also highlights the ability of certain cultural elements to influence globally.
Globalisation has enabled us to become better people, helping us to master more aspects of life and to evolve. However, it has also had a negative impact on smaller cultures, which lack the strength to resist assimilation by a culture as large and dominant as the global one. The world’s cultural richness lies in its diversity, and it is crucial to find a balance that allows for the coexistence and valorisation of all cultures.
Cultural globalisation presents a complex and multifaceted picture. While it has offered us the opportunity to enrich and evolve as a society, it also presents us with the challenge of preserving cultural diversity. It is essential that in this process of fusion and rapprochement, local cultural identities are respected and valued, so that globalisation does not mean homogenisation, but a celebration of the richness and diversity of our world.
The Beacon of the Markets:
A week of general setbacks in the equity markets, which have finally decided to take a break in a 2024 where the rises have been practically continuous since the beginning. The indices that had clearly stood out in terms of profitability throughout the year, American and Japanese, were the ones that fell the most last week. Thus, from the highs set on 10 July, the Nasdaq fell by -8.9%, while the S&P 500 and the Japanese Nikkei fell by -3.1% and -9.9% respectively. The difference in returns between the technological Nasdaq and the S&P 500 suggests that fund managers may be rotating their portfolios away from mega-cap stocks (Microsoft, Amazon, Alphabet, Apple, etc), towards medium and small companies (with greater relative weight in the S&P 500 and which are performing better in view of the expectation of a further interest rate cut in September by the Fed). The declines in Europe have been moderate in the same period (Eurostoxx 50 -1.9%), as this market has been showing a certain bearish tone for two months now. All in all, we are starting August with markets that have performed extraordinarily well, as reflected in the revaluation of the MSCI World, the index that includes most of the world’s main developed economies, which has already risen 11.2% in the year.
In fixed income, the main benchmark bonds seem to be anticipating upcoming downward rate movements by central banks, and we can see both the US 10-year bond and the German 10-year bond moving very close to the lows of the last 4 months, with yields of 4.16% and 2.36%, far from the highs they reached in October last year (5% for the US 10-year bond and 3% for the German bond).
As for commodities, oil has been surprisingly stable all week, moving in a very short range, between 80 and 82 $/barrel, which coincides with the average level of the last three months. Something similar has happened with currencies, where the Eur/Usd pair has moved in a very narrow range slightly above 1.08 Eur/Usd, although it is true that the European currency has behaved very stably all year against the dollar, as the European Central Bank is not expected to conduct a monetary policy very different from that of its American counterpart.
By now, a third of the American and European companies have presented results, and so far the general trend is that earnings per share are exceeding analysts’ forecasts. Particularly good growth is being reported by US companies, showing 8% year-on-year growth, with higher revenues, but above all higher profit margins. However, on a specific level, those presented by some of the so-called ‘Magnificent 7’, such as Google or Tesla, have disappointed somewhat, a fact that could be behind the cuts we have seen in the last few sessions in equities.
In terms of economic news, this week we expect a lot of activity from the Central Banks, as we will have meetings from the FED (they are expected to maintain rates, but a 0.25% rate cut in September is increasingly likely), the Bank of Japan (which could raise rates from 0.1% to 0.25%) and the Bank of England, where we could also see rate cuts. Last week the Bank of Canada lowered rates by 25 bps for the second consecutive time, and in Europe, the ECB, which also maintained rates at its last meeting, is waiting for data that may be collected over the summer, in order to make a decision in September on further cuts.
The Quote:
And we say goodbye with the following quote from the Spanish physician and scientist Santiago Ramón y Cajal: ‘Books give us their advice without pedantism or haughtiness. Of all our friends, they are the only ones who shut up after speaking’.
We do not leave without wishing you a very happy summer from all the Portocolom AV team. We will be back in September!
Summary of the performance of major financial assets (7/29/2024)
This report does not provide personalized financial advice. It has been prepared independently of the particular financial circumstances and objectives of the people who receive it.
This document has been prepared by Portocolom Agencia de Valores S.A. for the purpose of providing general information as of the date of issuance of the report and is subject to change without notice. Portocolom Agencia de Valores S.A. assumes no obligation to communicate such changes or to update the content of this document. Neither this document nor its content constitutes an offer, invitation or solicitation to purchase or subscribe for securities or other instruments or to make or cancel investments, nor can it serve as the basis for any contract, commitment or decision of any kind.
The information contained in this report has been obtained from public sources considered reliable, and although reasonable care has been taken to ensure that the information contained in this document is not inaccurate or misleading at the time of its publication, we do not represent that it is accurate and complete and should not be relied upon as such. Portocolom Agencia de Valores S.A. assumes no responsibility for any loss, direct or indirect, that may result from the use of the information provided in this report. Past behavior of variables may not be a good indicator of their future performance.