Markets
Cash and bonds move more into focus
Looking ahead to the current month of July and the upcoming summer months, we are becoming somewhat more cautious. Holding a little more cash or selectively switching from equities to bonds seems sensible. One reason for us is US consumption, which is developing more weakly than expected.
Europe heralds interest rate turnaround, markets remain stable
We remain constructive with regard to the month of June. A massive slump on the markets is not currently expected. Interest rates may have peaked this year and could now fall. Overall, however, the interest rate environment in both the USA and Europe is unlikely to fall as quickly as planned or hoped. Bonds in the medium maturity range remain interesting.
Doves and falcons
The stock markets in Europe and North America performed well in May and were largely able to equalise the losses from the previous month. This positive development was once again driven by market expectations that the doves could prevail over the hawks in monetary policy. However, the rally stuttered from around the middle of the month onwards, as various data suggested that inflation would remain stubbornly high.
Good US economic data and AI provide momentum
The stock markets maintained their momentum from the previous month in February and performed very favourably. The continuing enthusiasm for the topic of artificial intelligence drove the markets, as did good economic data from the USA. The markets in Asia also rose sharply. One factor behind this could be the hope that Chinese growth will pick up again.
Market expectations: too optimistic about interest rate cuts?
2024 got off to a positive start: the global MSCI share index gained around 2.85 per cent in the first month of the year, while the DAX rose by 0.91 per cent. The upward trend was primarily driven by the good performance of technology and healthcare stocks.
Positive Momentum
The international stock markets initially moved mostly sideways in January and were able to maintain their positive momentum from before the turn of the year in the second half of the month. Only China, otherwise a strong driving force behind the global economy, is sluggish. And hopes of interest rate cuts turned out to be premature.
Interest rate optimism supports equity and bond markets
The positive trend on the international equity and bond markets continued in December, albeit not quite as briskly as in the previous month. Market participants expected interest rate cuts against the backdrop of falling inflation data. The US Federal Reserve held out the prospect of this for 2024.
Key interest rate expectations too optimistic?
Looking at the current month of December and therefore also the rest of the 2023 financial year, the positive sentiment should continue. The current year-end rally could therefore go on, but whether this will also be the case in the coming year remains to be seen.
Stock and bond market rally
Falling interest rates and renewed hopes of a moderate change of course by the Fed drove both the equity and bond markets. Investors became increasingly confident that the central banks had reached the end of their cycle of interest rate hikes. Inflation data was lower than expected on both sides of the Atlantic.
Catch-up potential until the end of the year
Looking ahead to November and the remainder of the fourth quarter, we are somewhat more confident than in previous months. A recovery on the markets is possible. Historically, November has always been a positive month after previous losses in August/September/October, based on the US S&P 500 index.
Opportunities through special situations
Looking ahead to the current month, we remain cautious, even if a short-term recovery (due to market technical factors) is possible. The monetary situation can still be classified as negative. However, if you focus on special situations, you should be able to get through this phase well.