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All VP Bank Market News
Here you'll find all financial news of the following categories:
- News from the financial markets
- Spot analysis
- Investment ideas
- Economic Outlook
- Tactical Positioning / Our View
2021
News from the financial markets
VP Bank Corona-Crisis-Barometer: Despite the tense new infection situation, further improvement
The economy is twofold
Our View
Banking on the recovery
Financial markets have started with confidence into the new year. A hard Brexit has been avoided and the signs for 2021 are in favour of a recovery despite the high Corona case numbers.
2020
News from the financial markets
Climate Change Stimulus
First the EU, then China, and perhaps soon the US – all aiming to become climate neutral within decades. This will require enormous investment spending, both public and private. The time is ripe. And it’s time for investors to get on board.
Our View
With confidence into the new year
If one were to look at the current state of the equity markets, one might think that the Corona pandemic was just a bad dream. Even if some expectations of a normalisation seem exaggerated, there are good reasons to look to 2021 with optimism.
News from the financial markets
Green recovery
The fallout from the Covid-19 Pandemic will be long-lasting, but the indications are that the years ahead will see a recovery. Investment in the green economy will provide important impetus.
Our View
Hope in the midst of the Covid-Crisis
The second wave of Covid infections has got us under control. But there is hope. Progress in vaccine development has been greeted euphorically by the markets. After the US election, a new relief program is also within reach.
News from the financial markets
Biden beats Trump
Joe Biden is the president-elect of the USA. After a nerve-racking counting marathon, the 77-year-old Democrat and former vice-president in Barack Obama's administration has managed to gather more than the 270 electoral votes he needed. With the 56-year-old Kamala Harris, for the first time in the history of the USA a woman was elected to the office of US Vice President.
News from the financial markets
US-Election: No winner yet
The results are delayed. The race for the US presidency is still undecided.
News from the financial markets
Pandemic fear hits stock markets
Rising uncertainty due to the second wave of Covid-19 infections sends stock markets down.
News from the financial markets
US presidential elections: It could last a bit longer
The election of the next US president will happen in less than a week. Since there is a high volume of mail-in votes, it could take longer than usual until the final results are in.
Our View
Two themes dominate the financial markets
In the financial markets, the discussions are currently centered around the US elections and the Covid infection figures. What VP Bank Chief Investment Officer Dr Felix Brill advises in this environment.
Investment ideas
Green City - opportunities from sustainable urbanisation
Today, more than half of the world's population lives in cities, and the proportion continues to rise. In order to cope with this increase without compromising the quality of life, cities need to rethink their strategies. Not only ecological sustainability and resource management, but also digitalisation, are pivotal aspects of future urban development.
Our View
All eyes on the US election
Joe Biden should not feel too safe. Four years ago, Hillary Clinton was also comfortably in the lead in the polls but lost in the end. Nevertheless, the chances of a clear victory for Biden and the Democrats in the US presidential election on November 3 have increased recently. That makes us confident.
News from the financial markets
What awaits us after the US presidential elections?
Republican President Donald Trump and Democratic challenger Joe Biden could hardly be more different. While Biden is counting on a more equitable distribution of wealth and a “greener economy”, Trump’s rallying call remains “America First!”. In the following discourse, we dig deeper into what the November election results mean for the US economy, the US dollar and the stock markets.
News from the financial markets
New escalation in brexit negotiations
This is the eighth round of negotiations for a post-divorce trade agreement between the EU and the UK. The talks so far have been difficult. Now Boris Johnson is provoking the European mainland with a delicate draft law.
Our View
A season with politics
The Corona pandemic is still preoccupying the world. Still, other topics are making it onto the front pages more often: Demonstrations in Belarus, the Brexit negotiations and of course the US presidential election. This autumn promises to be politically charged. Almost like in normal times.
Our View
The virus has not been defeated yet
The gold price soaring, the US dollar sinking - the last few weeks have been tough. In this environment, the stock markets have performed differently from region to region. Europe struggled, while the US and emerging markets were able to add gains. Against the background of a renewed rise in Covid-19 infections, we confirm our cautious portfolio stance.
News from the financial markets
Strong euro, weak dollar
The US dollar has taken a beating. There have long been a number of good reasons for this, at least from a fundamental standpoint. Occasionally, the greenback has shown a bit of muscle due to its function as a “safe haven”. But now there are increasing signs that the winds of change are at hand. After seemingly endless negotiations, the eurozone member states have agreed to finance a coronavirus recovery fund, something that should also give a boost to the euro. At the same time, it appears that USD is on the verge of another fainting spell.
Investment ideas
The impact of the corona crisis on companies
Social distancing, home officing, compulsory masks: the COVID-19 Pandemic has changed our lives in ways that will shape the future. The same applies to equity markets. In the following, we take a closer look at four trends that will mark the coming years, as well as reveal which companies stand to benefit from those developments.
Our View
W-shaped recovery on the horizon
The economic indicators are recovering, but the question marks are increasing. Is the revival lasting? Are there still setbacks looming? In any case, we believe that the probability of a so-called “W scenario” has increased. This speaks in favour of taking precautionary measures in the portfolio.
News from the financial markets
How the US President is affecting the dollar
Despite enormous power, the President of the United States can't influence the value of the dollar directly. However, with considerable budget deficits, he may manage to do just that.
News from the financial markets
Will Covid-19 overtrump Trump?
Some four months from now, Donald Trump will stand for re-election as US President. His chances for victory have diminished due to the coronavirus pandemic.
Our View
Trust is good, caution even better
In the current crisis not only the central banks have intervened quickly, but also the governments. The financial markets have gratefully accepted the flood of liquidity and the economic stimulus packages. We remain cautious.
News from the financial markets
Five reasons why the dollar will weaken
The US dollar will depreciate over the long term. It is overvalued on the basis of the purchasing power parity theory and the inflation rate in the USA also speaks against it. The dollar will become a weakling.
Investment ideas
Digital Transformation: Alexa, get my work done
No matter whether beverage bottler Coca-Cola Hbc fills 42,000 pet bottles per hour or Amazon uses more than 100,000 autonomous robots in its warehouses worldwide, the manufacturing credo “ever-faster, ever-cheaper” is passé. Individual customer specifications, a high degree of production flexibility and close interaction between man and machine will drive the factories of the future.
News from the financial markets
Forex markets under the spell of the corona crisis
The foreign exchange markets have also been rattled by the COVID-19 pandemic. The currencies traditionally viewed as “safe havens” are in demand, whilst the rest have been left in the dust, with some of them suffering massive losses. Investors may now be of a mind to bot-tom-fish. However, it is important to take a closer look before jumping into the water.
Our View
Prepare for a second wave
The return to normality has begun. The financial markets have responded well to the relaxation of containment measures in recent weeks. The big question now is whether the worst is over. We recommend being prepared for the worst and arming the portfolio against possible setbacks.
Investment ideas
Convertible Bonds — Investing with an airbag
Covid-19 represents uncharted territory. Trying to protect people’s health whilst simulta-neously cushioning the disease’s effect on the economy and financial markets poses an unprecedented challenge. This gives rise to both positive and negative scenarios for the future. One thing is certain, though: market volatility will remain high in the months ahead. Thus it is all the more important today to have a plan b in place when investing – something that convertible bonds already incorporate.
Investment ideas
Dividends in times of economic quarantine
Dividends have been very popular in recent years because of the low interest rate environment. The current crisis will not change this. However, the equity selection is even more important because many companies may be forced to cut dividends.
Tactical positioning
A long way back
The corona crisis has sent financial markets on an unprecedented roller coaster ride. The consequences of the pandemic containment measures will continue to be felt in society and in the economy for a long time to come. Therefore, we think it is too early to sound the all-clear for financial assets. We balance the risks in the portfolio.
Investment ideas
Topsy-turvy bond markets
The novel Coronavirus has knocked the bond markets for a loop. Credit risk premiums have increased across the entire rating spectrum. We recommend resisting the allure of high yields and would instead position defensively.
News from the financial markets
Economy and markets under shock from pandemic
The novel coronavirus (COVID-19) continues to spread further across the globe, and the restrictions on public life aimed at halting the contagion are hitting the economy hard. At present, it seems possible that global economic output will crater at an annualised rate of up to 30%. Thus the consequences are serious indeed, not just for investors.
Tactical positioning
It's not over yet
The corona crisis eclipses much of what we have experienced in our lives. The extreme stock market swings continue unabated. While they closed down on almost all days in recent weeks, the opposite was true this past week. The US stock index S&P 500 rose by a whopping 18% in three days and thus as strongly as last seen in the 1930s during the Depression. For us, this is a signal: we recommend reducing the tactical equity overweight and, secondly, to be prepared for setbacks.
Tactical positioning
A first breath of fresh air
Stock market daily gains of the magnitude seen on Tuesday are rare. In fact, the Dow Jones Index recorded its largest daily gain since 1933, showing how stock markets are trying to anticipate positive developments even though the economic effects of the corona crisis are only slowly being felt.
Tactical positioning
The Fed is leaving no stone unturned
The US Federal Reserve did not wait until the regular meeting in the middle of this week, but already acted on Sunday. The key interest rate will be cut by 100 basis points down to practically zero. Bond purchases will be scaled up again substantially and a whole series of short-term measures are being taken to improve liquidity in the banking system. The message could not have been clearer: The Fed is throwing everything into the balance.
Tactical positioning
From shock to crisis
The broad equity indices in Europe and the US again lost 10% or more on Thursday. All investments that are somehow considered risky crashed. Five recommendations to navigate this market environment.
Spot analysis
ECB gives generously, but leaves interest rates unchanged
The European Central Bank (ECB) is trying to play its part in the coronavirus crisis management. It will increase its existing securities purchase programme by an additional EUR 120 bn by the end of the year. The purchase of corporate bonds is expected to play a large part in this.
Tactical positioning
Time of extremes
Financial markets are experiencing wild swings these days. They have had to deal with difficult news such as the establishing of a protection zone in Italy, the temporary suspension of trading in the US stock market and the dramatic fall in the price of oil. This has led to enormous intraday movements. We are reacting to the extreme swings of recent days by realising gains on bonds and increasing the equity allocation.
Tactical positioning
Keep calm
The fall in oil prices and the increase in coronavirus cases trigger another weak day in stock markets. We recommend not to act hastily.
Tactical positioning
Bring back equities
The market reaction to the extraordinary cut in interest rates in the US shows the great uncertainty of investors. VP Bank is adjusting its tactical allocation in two respects.
Spot analysis
Fed cuts key interest rate by 50 basis points
The US Federal Reserve lowers the target range for the key interest rate by 50 basis points.
Tactical positioning
Do not get infected
The uncertainty about the spread of the new coronavirus (Covid-19) outside of China has led to large losses in equities in a short period of time. Investors should not allow themselves to be infected by the panic. VP Bank is closely monitoring the situation, but at present we do not see reasons to make changes to the well-diversified portfolios.
News from the financial markets
Trump sitting tall in the saddle
Once the final votes are tallied from the “Super Tuesday” round of primary elections, the field of Democratic presi-dential candidates is sure to narrow. Our analysis shows that US President Donald Trump has a good chance of staying in the White House – no matter who runs against him in the November election.
News from the financial markets
Coronavirus captures global stock exchanges
The increasing spread of the coronavirus outside of China has led to a sharp correction of financial markets. However, uncertainty is also fuelled by the fact that the critical incubation period is likely to be longer than previously assumed. In the past primarily the Chinese stock exchange has been suffering, however, the recent expansion into Italy and Korea has put pressure on the remaining markets.
Investment ideas
European banks – tactical “Buy” recommendation
European banks are undergoing an intense transformation as a result of forced digitalisation and strict regulation. Despite those challenges, their latest financial statements are signalling improved operational strength. This surprising tendency and a fundamental undervaluation of these stocks opens a tactical investment window for active investors.
Tactical positioning
Under the spell of the corona virus
The coronavirus sent the financial markets into a tailspin at the end of January. Nevertheless, prices have recovered in recent days, and it is too early to give the all-clear. We confirm our broadly diversified portfolio positioning.
News from the financial markets
The franc flexes its muscles
The Swiss franc’s current show of strength is likely to be of a passing nature. As the year progresses, we expect to see somewhat higher prices for the EUR/CHF currency pair. However, the forex markets will probably first test the Swiss National Bank’s (SNB) resolve after the US included Switzerland in the Treasury Department’s list of purported currency manipulators, a move that has put the SNB on the defensive.
Investment ideas
Digital Transformation and Security - "Alexa, protect me!"
The digital transformation is accelerating at a torrid pace. Worldwide, more than three devices per person on this planet are connected to the Internet. This number is expected to triple over the next five years. The downside is an enormous increase in cyber crime. Thus, the protection of data, intellectual property and infrastructure is all the more important.
Tactical positioning
Signs of a recovery
The risk of a recession has decreased and a recovery has become more likely. That’s why we are increasing the equity allocation, with a focus on Europe.
2019
News from the financial markets
What does 2020 hold for investors?
The financial markets do not always follow developments in the real economy. We examine the themes that are likely to dominate 2020.
Tactical positioning
Ready for the new year
If nothing dramatic happens in the next couple of weeks, 2019 will go down as a very good year for investments. Our broad-based investment approach has been rewarded and with our current portfolio orientation, we think we are well-prepared for the new year.
News from the financial markets
Less sulphur, higher costs: green marine diesel oil burdens the economy
The exhaust from ship engines befouls the air, but that is about to change. From 1 January 2020, a new sulphur limit will apply to fuels used for shipping on the high seas. The new ordinance will have an impact on financial markets and the global economy as freight costs rise; after all, 80% of the goods traded worldwide are transported by ship.
Tactical positioning
No spring before Christmas
Many market participants are getting ready for a year-end rally. But the fundamental economic data simply isn’t giving us any Christmas cheer.
Investment ideas
Digital Transformation of Healthcare - Alexa: I’ve got a tummy ache
"Your colleague already asked me that question,” says hospital patient Hans Frick to the Senior Physician on duty. Everyone who has ever been drawn into the healthcare labyrinth knows Frick’s situation. The patients' information is not managed centrally. But this is just one example how digitalisation can improve our healthcare system.
News from the financial markets
Are US tariffs about to hit European car exports?
China has already been taken to task, so Europe now appears to be next the list. By mid-November, the US government will decide on the imposition of punitive customs duties on European automobile imports. Such a move would strike the European automotive industry hard, especially the producers in Germany.
Investment ideas
Digital Transformation Online Commerce - «Alexa: What shall I buy?»
In many ways the online shopping experience is far superior to the traditional way of going to department stores. This is deadly for the brick and mortar businesses, as long as they don’t adapt. But online-retailing is much broader than just the online-shops. Investors should seek exposure to the whole value chain.
Tactical positioning
A Question of Perspective
Weak economic data and worrying political uncertainties on the one hand; hope for government stimulus measures and supportive central banks on the other — in which direction the pendulum will swing in the next few weeks is far from clear. For us, risks currently predominate, which is why we confirm the broadly diversified, cautious portfolio composition.
News from the financial markets
Chinas Mission
70 years after the proclamation of the People’s Republic of China, the country seeks a new role. The hitherto successful growth model is waning and the internationalisation is not without risk politically. How China will master its transition is most relevant for the rest of the world, probably more than ever before.
News from the financial markets
Oil Price increase manageable
The price of oil rose sharply at the beginning of the week after the attack on Saudi Arabian production facilities on Saturday.
Investment ideas
Digitale Transformation in Education - «Alexa: Make me smart»
Blackboard, writing pad, ballpoint pen represent the old ways. In the future, education won't be without digital tools. This will help access to education and individualise learning.
Tactical positioning
Winter is coming
Several central banks have already reacted to the recent weaker economic data. Nevertheless, there seems to be no way around a recession. Yet, not all market participants share this pessimism. VP Bank is sticking to the cautious positioning of its portfolio. In the bond position, duration is reduced.
Investment ideas
Digital Transformation - The path to the future
The future is smart and connected. The digitalisation will change our own lives as well as business models. In a new multipart series named “Digital Transformation – The path to the future” we will show which drivers are changing the way business is conducted in the future and how investors might profit from that.
Investment ideas
Best Manager Selection - Addition: Pictet CH Solutions – Swiss High Dividend
Yields of more than 4% are still achievable even in the current interest rate environment. However, the prerequisite is that one invests long-term and accepts fluctuations in the value of the shares. Please contact your client advisor for more information.
Tactical positioning
Rising Anxiety
The anxiety in financial markets has increased noticeably in August. We are all the more convinced of our decision to diversify the portfolio more broadly with the inclusion of gold and insurance-linked securities as well as to underweight equities.
News from the financial markets
Boris Johnson forcing a hard Brexit
Fears of a hard Brexit are on the rise. The new British Prime Minister Boris Johnson is uncompromising towards Brussels and threatens to withdraw Britain from the EU without an agreement. But the British parliament has voted against such a drastic course of action, thereby making the situation just as difficult for the fledgling PM as it was for his predecessor Theresa May. So there is still the prospect of a soft Brexit, which would have the effect of a strengthening Pound Sterling.
Investment ideas
Stabilised returns with Dividends
At the moment, equities are yielding more than bonds. The yield difference between the two in Europe is at an extreme level, which looks like an opportunity for long-term investors.
Tactical positioning
The Power of Words
Just in time for the end of the first half of the year, stock markets have moved higher again. This has been one of the best semesters in stock market history. However, as the economic outlook for the rest of the year has deteriorated, we are realising some of the profits and reduce equity risk in the portfolios.
News from the financial markets
Central banks open a new chapter
The global economy is no longer in the best of shape. But the fact that the major central banks are changing course so hard is still surprising. Apparently, interest rate cuts lie on the horizon for the second half of the year. This is an extraordinary change of course, inasmuch as the global economic winds are blowing at the pace of their long-term average. We are seeking explanations for this overly cautious route.
Investment ideas
New inclusion: FISCH Convertible Global Defensive Fund
In today’s market environment, Convertible Bonds – which essentially constitute a combination of bonds and shares – are an interesting alternative for the long-term oriented investor, in that they can reduce equity risks whilst also affording upside price appreciation potential. The FISCH convertible global defensive fund takes advantage of this dual-purpose profile but is more conservative than other convertible bond funds as a result of its principal focus on investment grade securities.
Investment ideas
Beware when selecting corporate bonds
Globally, the outstanding volume of corporate bonds has more than doubled since the financial crisis. By virtue of central bank monetary policy in recent years, interest rates and bond risk premiums have remained extremely favourable. The result: bloated corporate indebtedness and poorer credit ratings.
Tactical positioning
Reducing Risk
The global economy is still growing, but so too are concerns about a looming recession. Against this backdrop, we have decided to close the portfolio overweight in emerging market equities and introduce Insurance-Linked Securities (ILS) as an additional diversification element alongside gold.
News from the financial markets
The trade war drags on ... and on, and on
The trade dispute between the US and China has escalated. The US policy is not just about balancing the trade deficit with individual countries. The strategic goal is the protection and exclusive use of American intellectual property. What significance do punitive tariffs have for companies and consumers, and what do investors have to keep in mind in this uncertain environment?
Tactical positioning
Brinkmanship
The trade conflict between the US and China has reached the next level of escalation and put the financial markets under pressure. No solution is expected until the G20 summit in late June. In this uncertain environment, we continue to recommend mixing diversifying elements such as gold into the portfolio.
News from the financial markets
The VP Bank Eurozone recession barometer
A number of crucial leading indicators are heading south, new factory orders are dwindling, and growth forecasts are being scaled back: such is the current macroeconomic backdrop in the eurozone. Consequently, fears of an impending recession are on the rise. The VP Bank eurozone recession barometer reveals how high the probability of an imminent decline in eurozone gross domestic product (GDP) actually is.
Economic outlook
Economic Outlook April 2019
First the good news: major leading indicators suggest that the Chinese economy is regaining momentum. This impetus from the Far East now needs to spread as quickly as possible to Europe. The European economy is not in good shape. A significant weakening of global trade volume compared with last year is putting a brake of the eurozone’s export-oriented industries. The US economy, by contrast, still looks solid.
Tactical positioning
Tactical Positioning
The returns delivered by financial markets since the beginning of the year have been pleasing. But it is no time to sit back and relax. For one thing, the recent inversion of the yield curve in the US has fuelled concerns about recession. Even if a recession is not imminent, the risk has grown. We increase the allocation in gold.
Investment ideas
“Safety first” with convertible bond
Investors are once again upbeat on the prospects for economic growth in china. And the about-face by the US Federal Reserve supports the optimists. But what if Brexit ends in chaos or the trade conflict between the USA and China does not end as expected? In this environment, where potentially sharp market swings can crop up at any moment, convertible bonds are just the right thing. More information you'll get from your client advisor.
News from the financial markets
Equities and inverted yields: "So what?"
On 19 December 2018, 3-month USD Libor exceeded the yield on 10-year US Treasuries for the first time since the financial crisis. For many investors, this has set the alarm bells ringing. Why? Because, in the past, this development has usually heralded a recession in the foreseeable future. Having discussed the current state of the economy in the leading regions ("Is a recession imminent?"), we now analyse how the equity market will be affected.
Investment ideas
VP Money Fonds: an alternative to negative interest rates
Earning any sort of interest income is not so easy these days: Money market rates in both the Eurozone and CHF will remain negative for some time to come. Especially in the EU region, economic growth is decelerating at a faster than expected pace. The anticipated return on VP Money Funds in CHF and EUR significantly exceeds going money market rates, even as participation in any potential interest rate rise is assured.
News from the financial markets
Market update: Return of uncertainty
After weeks of calm, uncertainty has returned to financial markets. In January, the Federal Reserve's communicative turnaround kicked off the recovery rally. On Thursday, the Fed ruled out further rate hikes for this year. The reduction of the central bank balance is also expected to come to an end sooner than expected. The first reaction of the market had been positive, but Investors came quickly to the conclusion, that if the Fed becomes skeptical, the economy does not have to be in good shape. The demand for safe bonds rose, which depressed the yields on long-term government bonds.
Spot analysis
Market update: return of uncertainty
After weeks of calm, uncertainty has returned to financial markets. In January, the Federal Reserve's communicative turnaround kicked off the recovery rally.
Tactical positioning
Tactical Positioning March 2019
Despite economic risks, the financial markets have performed well thus far this year. In our view, the chances are good that the positive environment will continue in the coming weeks. This is supported not least by the new stimulus measures in China. Against this backdrop, we have decided to increase emerging market equities in the portfolio.
Investment ideas
A different way to harness future dividends
In order to benefit from attractive dividend payments, an investor normally hast do bear the underlying equity risk. In the case of dividend futures, things are different. Owing to today’s downbeat expectations, futures contracts on forthcoming dividend payments represent an interesting alternative for seasoned investors. Get more information from your client advisor.
Investment ideas
Invest in Quality
For several months now, investors have witnessed historical equity market price movements that are being driven by hopes and fears as well as the perpetual quandary of whether the glass is half-full or half-empty. Thanks to the US-Federal Reserve, the glass now seems to be full again, and wishful thinkers are even pricing-in an interest rate cut for the current year. As earning expectations for 2019 continue to be trimmed, in certain cases drastically, companies with strong fundamentals gaining much greater importance. Get more information from your client advisor.
Investment ideas
Take advantage of USD interest rates
Earning interest income these days is not so easy: both in the Eurozone and Swiss Franc realm, yields on money market instruments and in certain parts of the bond market remain negative. The US Dollar is an exception to this rule. Here, both short and long maturities are firmly in the black. Nonetheless, in order to counteract possible further rate hikes, short maturities are recommended. The product we have selected combines a generous yield, a short holding period and high credit quality. Get more information from your client advisor.
Economic outlook
Economic Outlook
The world economy is flagging. The eurozone, in particular, is experiencing a rapid decline in business momentum. One-off factors are playing a role, but Europe is also affected by the tribulations of the Chinese economy, which is apparently in worse shape than official numbers indicate. China’s difficulties have a major impact on Europe’s export-oriented industries. The Chinese government has introduced a raft of measures to head off a more serious downturn. This suggests at least a moderate improvement in the global economic situation during the second half of the year.
Tactical positioning
Tactical Positioning Februar 2019
To get right to the point, global economic risks have increased and not diminished. The economic slowdown has also been high on the agenda of the central banks. At least the financial markets are getting some support from the Fed.
Investment ideas
Take Advantage of Dividends
“In Europe, investors’ focus in the spring months regularly tends to centre on equities with attractive dividends. The reason: the annual one-time profit distributions to share-holders. This of course gives rise to the impression that the market as a whole can be outsmarted. But if you want to profit from dividends, you should consider the long-term advantage of owning stocks with consistently high dividend yields rather than concentrating on short-term yield optimization.” Get more information from your client advisor.
Tactical positioning
Improvement in sight?
In our market commentary a month ago, we expressed our concern that the environment would be challenging beyond the turn of the year and vulnerable to sharp mood swings. Unfortunately, this proved to be even more pronounced than we had feared.
2018
Economic outlook
Wirtschaftlicher Ausblick Dezember 2018
The global economy starts the new year in the grip of a wintry cooldown. Most leading indicators around the world are now in decline, and some countries were already reporting a contraction of GDP in the third quarter.
Tactical positioning
Tactical Positioning December 2018
The past few weeks have once again demonstrated the great influence psychology exerts on financial markets. Just a tweet from Donald Trump could shift the mood from exaltation to despair. In this difficult environment, our underweight in equities has proven its validity in the portfolio from a tactical point of view.
Investment ideas
Profit from the game with oil
“The USA is “playing” with oil. First, the price was driven higher by the re-imposition of sanctions on Iran. Then, surprisingly, the US- administration made sales concessions to Iran. This triggered a downright slump in the market – the price of oil tumbling by nearly 30% - since when Bear Market conditions have prevailed.”
Tactical positioning
No all-clear signal yet
The market environment continues to be challenging. After the sell-off in October and the rebound early November, market turbulence recurred in recent days. Against this backdrop, we reaffirm our cautious stance and continue to recommend underweighting equities in particular.
Investment ideas
China Consumer Basket
China has been in a phase of transformation for several years now. Its economic growth should be based more broadly on domestic consumption and less on the country’s still enormous export surplus. The aim is to make China less dependent on global trade and ultimately turn the middle kingdom into a services-oriented economy rather than just a low-cost production site.
News from the financial markets
US midterm elections to determine Donald Trump’s future political agenda
The policies of the American president are about to be put to the test. On 6 November 2018, the midterm elections will enable US voters to show how satisfied they are with the government's work. According to survey trends, there are no signs of a sweeping victory for the opposition: in the Senate, the Republicans are likely to retain the majority, whereas a change in leadership is likely for the House of Representatives. The following commentary delves into the potential implications of the election outcome on the financial markets.
Tactical positioning
The side effects of monetary policy
Normalisation of monetary policy has long been a major talking point on the markets. But recent weeks have shown that a return to higher interest rates is not plain sailing. In the short term we believe that the scope for further interest rate increases is exhausted. The resultant breathing space should be good for emerging market bonds.
News from the financial markets
Emerging markets under pressure – A general conflagration is not to be anticipated
The emerging markets are currently in the spotlight. Due to the massive currency price losses in places, the question arises as to whether there is now the threat of payment defaults. However, the situation between the different countries is significantly more heterogeneous than was the case, for example, in the 1980s and 1990s. Some countries are coping better than others with the currency price losses. Therefore, a general conflagration accompanied by an extensive payment default in the emerging markets is not to be anticipated.
Tactical positioning
Challenging market environment
The US economy continues to perform dynamically. The main drivers are exports, personal consumption and business investment. The signs are that GDP will continue to grow robustly in the second half of this year, though the Q2 result is unlikely to be bettered; the jump in net exports was an exceptional development attributable to new tariffs.
Investment ideas
Global Health Care: "Invest in health"
To many investors, the healthcare sector appears to be less than dynamic. Wrongly, because the strategic drivers aeging’ ,“Efficiency” and “technology” will have a decisive influence on the industry. The resulting transition is spurring above-average growth, even as it keeps the healthcare system affordable.
News from the financial markets
Country focus Turkey: Difficulties on the Bosporus
The new Turkish lira (TRY) has suffered dramatic losses in recent weeks, a move that has accelerated over the past several days due to new sanctions imposed on Turkey by the USA in response to the continued detention of American pastor Andrew Brunson. As Turkey’s private sector is mainly indebted in foreign currencies, the domestic banks now run the risk of becoming insolvent. And because they in turn are indebted to European banks, the possibility of contagion to the global financial markets has become a major concern.
Economic outlook
Economic Outlook
These are stormy times on the international scene.
Tactical positioning
Equity markets stabilizing
July has seen a recovery on the equity markets, with tensions regarding the international trade conflict shifting from Europe to China. We are maintaining a neutral position in equities and are still underweight in bonds. We are overweight in alternative investments due to our position in gold.
Tactical positioning
Emerging markets in focus – purchase of gold as hedge against geopolitical risks
The effects of Fed’s more restrictive monetary policy are being felt most of all in the emerging markets. We are maintaining our neutral positioning in equities and remain underweighted in bonds. The alternative investments quota has been increased via the purchase of gold.
Investment ideas
High quality investing
Corporate earnings expectations in almost all regions showed a renewed improvement in the second quarter. However, rising interest rates and escalating trade conflicts are unsettling financial markets and are pushing up credit risks.
Economic outlook
Economic Outlook
These are stormy times on the world political scene. Populist parties have taken the helm in Italy, while Donald Trump is threatening further tariffs on US imports.
Tactical positioning
Profit taking on European equities
Earnings growth, high dividend yields and the depreciation of the euro are supportive factors for the European equity market, but recent political commotions and weaker macro data create headwinds.
Investment ideas
Tactical recovery
The abrupt plunge in share prices at the outset of the year has to be seen as starting point of a protracted strategic consolidation of global equities. Within this broad horizontal pattern, there are signs of an emerging recovery phase. In a best-case scenario, the highs achieved in late February could be revisited. Depending on the specific region/sector, this opens up a hypothetical upside of between 5 and 8%.“
Tactical positioning
Outperformance of European equities
The decision to increase our European equity allocation in February has paid off: European markets performing significantly better of late compared to the rest of the world.
Investment ideas
GBP – hopes for a “soft Brexit”
The British populace in the meantime has become extremely critical of the UK’s withdrawal from the EU. Thus in our opinion, a hard break with the EU is something that Theresa May’s government can scarcely take back home from the Brussels negotiations.
Economic outlook
Economic Outlook
The positive outlook for the global economy has recently lost some of its shine.
Tactical positioning
Consolidation continues
The sideways, albeit volatile movements in the equity markets persist, whereas the losses recorded since the beginning of the year have remained modest until now.
Investment ideas
Divends are the crux
Ever since the implosion of the dot.Com bubble, the global telecom sector has been been consolidating within a broad trading range, enormous debt loads and vast infrastructure investments, combined however with stable gross revenues and high dividends, characterise the industry. Now, following this protracted phase of consolidation, its earnings outlook has improved significantly. Hence, the window in time for tactical positioning is now open.
Tactical positioning
USA weighs import tariffs
Donald Trump’s intention to impose punitive tariffs on steel and aluminium imports has led to renewed jitters in the equity markets.
Investment ideas
Swiss Dividend Basket
The focus in the equity markets these days is squarely on price gains. Investors seem to be disregarding the fact that dividends are in fact the most important long-term source of returns.
Economic outlook
The world economy is buoyant and the upturn is strengthening
Never before have so few countries been in recession. In other words, the upturn is highly synchronised. The recently enacted tax reform in the US should lead to accelerated investment growth.
Tactical positioning
Tactical Positioning
Increased exposure to European equities
Investment ideas
How to profit from market volatility
Equity markets have significantly declined in recent days. While relatively little has changed from a fundamental perspective, the market perception has changed. The fear of rising interest rates is now prevalent. Read more at proLink
News from the financial markets
ECB aims to change the wording of its guidance
EUR continues to flex its muscles. The common currency has appreciated across the board and in the process surpassed the technically crucial 1.2050 level versus USD.
Tactical positioning
Neutral in equities – underweight in bonds
The equity markets started the year in an extremely positive fashion. Interest rates are still low. We remain constructive for the equity markets, but have become more cautious, primarily in light of the valuation level.
2017
Economic outlook
Economic Outlook
The global economy is on a recovery track. However, expectations should not be set too high.
Tactical positioning
Equities neutral – bonds underweight
The macroeconomic framework remains positive. Therefore, we expect interest rates to rise. Although we still maintain a positive outlook for the equity markets we have become more cautious due to the elevated valuation level. We are weighting equities at neutral and remain underweight in bonds.
Economic outlook
Economic Outlook
The world economy is showing somewhat stronger momentum this year and will register a higher growth rate than in 2016.
Tactical positioning
Equities neutral – bonds underweight
The economic outlook could hardly be better. Current global economic developments are lending support to the stock markets. In our view, though, a valuation level has now been reached that leaves the door open for disappointments. We are reckoning with higher interest rates and a continuation of the consolidation in the equity markets.
News from the financial markets
Bitcoin – what’s behind the hype?
Due to their enormous price gains in the recent past, cryptocur-rencies – above all, Bitcoin – are currently being touted as the monetary equivalent of the Holy Grail. But what is Bitcoin, and how does the frequently mentioned “blockchain” work?
Tactical positioning
European equity markets recover – Equity allocation reduced to neutral
European equity markets chalked up significant advances in September on the back of a weaker euro and good macroeconomic data.
Economic outlook
Economic Outlook
The world economy is showing somewhat stronger momentum this year and will register a higher growth rate than in 2016.
Tactical positioning
European equity markets recover – Equity allocation reduced to neutral
European equity markets chalked up significant advances in September on the back of a weaker euro and good macroeconomic data.
Investment ideas
The electrifying automotive sector
The automotive industry is in the midst of a transformation, with opportunities and risks for the relevant companies as well as for investors.
Investment ideas
Private Debt Markets – The «Afterbank» era
Following the financial crisis in 2008 banks pulled-out of credit markets in an attempt to deleverage their balance sheets and to comply with new regulatory rules. At the same time financing needs especially in middle market and SME businesses reached new highs.
Investment ideas
GBP: "Transition" is the magic word
The United Kingdom’s exit negotiations with the EU are proceeding at snail’s pace. Brussels is bemoaning what it claims is a lack of specific proposals from the British side. Yet it is becoming clear that both sides can agree on transition periods once the exit negotiations are over. This opens up new prospects – including for the GBP.
Investment ideas
Energy efficiency - a different approach to environmental protection
Every minute the world's population expands by 157 people. Per capita energy consumption currently stands at more than 1,900 litres of crude oil per year. Worldwide primary energy requirements have doubled since 1984.
News from the financial markets
Post-election Germany: What next?
Germany’s two major mainstream parties, CDU/CSU and SPD, have suffered substantial losses, to the benefit of the smaller political parties. Stunningly, the right-wing populist AfD came away with 12.6% of the vote and in one fell swoop will have the third-largest representation in the Bundestag. .
Investment ideas
Energy efficiency - a different approach to environmental protection
Every minute the world's population expands by 157 people. Per capita energy consumption currently stands at more than 1,900 litres of crude oil per year.
Investment ideas
Goldcorp benefits from rising gold price
Gold is back in favour. An increase in geopolitical risks and uncertainty regarding future monetary policy provide support for the price of gold. Gold companies have also benefited from this development.
Tactical positioning
Equity markets still steady – despite political risks
European equity markets are currently having to deal with multiple negative factors.
Tactical positioning
European equity markets consolidating
The upward momentum of European equity markets has been halted, due mainly to the strong appreciation of the euro.
Investment ideas
Investment theme: Here come the robots: The trend towards automation
Presently, on any given day, the same amount of data is being generated as was produced cumulatively from the beginning of mankind through the turn of the millennium.
News from the financial markets
EUR/USD: Euro flexing its muscles
The euro has gained considerable ground in recent weeks.
Tactical positioning
Market comment - End of ultra-easy monetary policy
Statements by the European Central Bank have heralded the end of ultra-expansionary monetary policy in the eurozone.
Investment ideas
Bank stocks in the spotlight
The gravitational force of today’s global growth is having a beneficial impact on the various segments of the financial industry.
Tactical positioning
Market comment - Weak US economic data only temporary
The latest figures for US economic growth were disappointing. Labour market data have softened, and confidence indicators have dipped.
Investment ideas
Infrastructure - an investment in the future
The sentiment in the financial markets could hardly be more upbeat at the moment.
Investment ideas
Investment idea/FX idea: EUR/USD - euro fantasies overdone
The euro has been the darling of the financial markets in recent weeks.
Economic outlook
Economic Outlook
World economy: Major leading indicators are signaling a moderate acceleration of global economic growth in 2017. The world economy is profiting mainly from the beneficial effect of somewhat higher energy prices on oil-producing emerging nations like Brazil and Russia, which will be able to dig themselves out of recession, though their growth rates are still unlikely to exceed a meagre one percent. Hopes in the industrialized world are pinned on the United States, where higher capital spending and solid personal consumption will drive economic growth.
Tactical positioning
Market comment - France has chosen
Emmanuel Macron has triumphed in the French presidential election. This is also a victory for the EU. Equity markets had already climbed steeply in the run-up to the ballot, and profit-taking might now occur.
News from the financial markets
France after the election: What next?
News from the financial markets - France after the election: What next?
News from the financial markets
French presidential elections: a mix of hope and fear
Round one of the French presidential elections is now history:
Economic outlook
Economic Outlook
Major leading indicators are signaling a moderate acceleration of global economic growth in 2017. Even so, the details do not provide comforting reading. The world economy is profiting mainly from the beneficial effect of somewhat higher energy prices on oil-pro-ducing emerging nations like Brazil and Russia, which will be able to dig themselves out of recession, though their growth rates are still unlikely to exceed a meagre one percent. Hopes in the industrialized world are pinned on the United States, where higher capital spending and solid personal consumption will drive economic growth.
Economic outlook
Economic Outlook
World economy: Major leading indicators are signaling a moderate acceleration of global economic growth in 2017. Even so, the details do not provide comforting reading. The world economy is profiting mainly from the beneficial effect of somewhat higher energy prices on oil-pro-ducing emerging nations like Brazil and Russia, which will be able to dig themselves out of recession, though their growth rates are still unlikely to exceed a meagre one percent. Hopes in the industrialized world are pinned on the United States, where higher capital spending and solid personal consumption will drive economic growth.
News from the financial markets
May the elections begin: SNB under pressure to act
The politically explosive 2017 election year is getting under way – but the political storm held off so far.
News from the financial markets
Brexit: The precarious British gambit
British Prime Minister Theresa May has introduced her EU exit strategy.