Market News
—
Keep your finger on the pulse of the financial markets
Daily News
Start your day by reading Morning Coffee News and you will be on top of all the major current developments on the world's financial markets. Our English-language Morning Coffee News Asia gives you a daily overview of all movements on the Asian financial markets.
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
- Our View
2022
Investment ideas
Thematic investing: Equal opportunity, education and security
Social aspects are just as important as environmental issues when it comes to sustainability. Equal opportunity, education and security in the broader sense play an important role in overall economic development. But they also open up promising opportunities within the framework of theme-based investing.
News from the financial markets
CIO Market update: Leave portfolio unchanged despite setback
Markets recorded a bumpy start to the new year. This peaked on Monday (24.1.) with a sell-off in equity markets.
Investment ideas
Impact with Microfinance
How to achieve a big impact in emerging markets with small amounts.
Our View
Disquiet in the bond market
2021 was a fantastic year for equities. In the first few trading days of the new year, however, rising yields on US government bonds have weighed on stock markets. The question is how high yields will climb.
News from the financial markets
Outlook 2022 - Betting on "transitory"
Like the pandemic-induced economic downturn, the post-lockdown recovery is presenting special challenges. The upturn has been so swift that supply has often failed to keep up with demand. Global supply chain disruptions and materials shortages have been exacerbated by repeated re-impositions of Covid restrictions in Asia. In view of the highly contagious omicron variant, there is a threat of further, temporary supply bottlenecks.
2021
Investment ideas
Rapidly growing market for bonds with an impact
With impact bonds, investors can to put their money to work in a way that has a measurably positive impact on society and the environment. The burgeoning market for green and social bonds opens up new opportunities for investors who are not just focused on sustainability, but who also want to make a real difference with their investments.
Our View
With optimism into the new year
The Omicron variant of the coronavirus has caused interim commotion on stock markets. An important reminder to pay attention to diversification in the portfolio even in good times. Despite short-term economic risks, we are generally optimistic for the new year.
News from the financial markets
Investing with a purpose
Sustainability has many aspects. Climate change is one, promoting social diversity or fighting poverty are other vital concerns. But before revamping the portfolio, we have to ask ourselves where and how we want to contribute. Purpose is a very personal matter.
Investment ideas
Thematic investing: Renewable energies and a circular economy
World leaders at the last climate conference in Glasgow reaffirmed the goal of limiting global warming to 1.5 de-grees Celsius. This formidable target can be achieved to a sizeable extent by replacing fossil fuels as the world’s primary source of energy. Such an undertaking will require huge investments in renewable means of power generation, such as wind, solar and water, as well as the use of alternative energy sources such as hydrogen and biofuel. But that alone is not sufficient: a circular economy is also needed in order to bring the already enormous and everincreasing demand for natural resources and energy back into an ecologically acceptable balance.
News from the financial markets
Dollar and franc flying high … for now
The US dollar and the Swiss franc have recently gained ground against the euro. The economic risks associated with today’s supply-chain bottlenecks and shortage of materials are lending support to the so-called “safe ha-ven” currencies. Once the flow of goods gets back to normal, both currencies can be expected to weaken.
Our View
The Fed has learnt from the past
The Fed will start reducing its bond purchases in November. Anyone who was surprised by this must have been living in a filter bubble over the past few months. The markets were well prepared, and there were no major price movements.
News from the financial markets
Impending sea change in monetary policy
As the Covid crisis gradually wanes and inflation risks increase, monetary policy will inevitably be-come more restrictive. At its upcoming Novem-ber meeting, the Fed will likely decide to trim its monthly securities purchases, whilst in Europe the probabilities are that the European Central Bank (ECB) will discontinue its pandemic emer-gency purchase programme (PEPP) as of March. For investors, this should not (yet) be a cause for concern.
Investment ideas
Thematic investing: Health and demographic change
Given the pressing issues surrounding climate action, the social aspects of sustainability are often overlooked. Yet the themes “health" and “ageing society” offer opportunities for investors.
Our View
The next round of catch-up effects is already waiting
Rising energy prices are currently dominating the daily headlines. The skyrocketing gas prices have now even put politicians on the spot. The central banks, however, are not yet letting this upset them.
News from the financial markets
The big questions about Evergrande
The impending bankruptcy of the Chinese real estate conglomerate Evergrande has for a long time preoccupied the Asian stock markets only. Recently, however, concerns about a contagion of the global financial system came to the fore. Evergrande is heavily indebted and it is likely to miss interest payments. While the company announced today, Wednesday, that it would make the interest payment on a local bond, no details were given on the offshore bond, which is held by international investors, due this week.
News from the financial markets
China’s battle against inequality
Investors have been unsettled in recent weeks by a slew of new regulations imposed by the Chinese government. After this price adjustment initially weighed only on local markets, fears of possible consequences spread to global stock exchanges today. Here we look at the impact of these changes on Chinese equities and bonds.
News from the financial markets
No change of direction expected after Germany’s federal election
Germany’s political parties like to characterise the upcoming federal election as a critical moment of choice between competing policy directions. We disagree. The agenda for the new legislature is already largely fixed, and the new government will have little scope for altering it. In this situation we do not expect the election result to have a significant impact on the financial markets.
Our View
Focus on China
The economic recovery globally is progressing despite persistent supply bottlenecks. At the same time, leading central banks are keeping a steady hand for now. However, equity investors are looking to China.
Investment ideas
Investing in the green and social transition
It is possible to achieve returns and to help meeting sustainability goals at the same time. We have identified five thematic buckets for sustainability oriented investors and present suitable investment solutions.
Investment ideas
Thematic investing: Environment and climate action
The consequences of 200 years of industrialisation, based primarily on fossil fuels, are having a destructive impact on the natural environment, climate, environment and biodiversity. Urgency is needed to avert or mitigate lasting damage. This is opening up unique investment opportunities.
Our View
Recovery ahead
Companies are reporting results above projections, but are trying to steer investors' expectations in a more realistic direction. Most markets have weathered this well so far, as well as uncertainty about regulatory intervention in China or higher inflation rates. This shows: The economic recovery is on track despite stumbling blocks.
Our View
Economic risks have not disappeared
The vaccination campaign is making progress worldwide, now also in emerging countries. This takes some fear out of the delta variant of the Coronavirus. Nevertheless, economic risks are being discussed more intensively again. We are familiar with this: Even in summer, it's worth keeping an eye on the weather radar.
News from the financial markets
Special Case China
China likes to present itself as an emerging market economy rather than a developed one. But the rest of the world sees things differently. There are five good reasons why China no longer qualifies as a typical emerging market.
News from the financial markets
VP Bank Corona-Crisis barometer reaches initial level
Global industry looks ahead to glittering new orders are moving forward. Life is increasingly returning to normal in the face of a low incidence of infection.
News from the financial markets
Yields are not hurting equities yet
Start-of-year optimism has paid off for investors. Life is still dominated by the pandemic, but large parts of the economy are in action again. Plunging activity seemed to herald even greater economic pain, but this has been warded off by ultra-expansionary central bank policies and massive fiscal relief.
News from the financial markets
US inflation: No major threat – unless…
The annualised US inflation rate has spiked in recent months, with the May reading of 5% far exceeding economists’ estimates. Many investors now fear that the pace of consumer price increases will remain at an elevated level – a concern that would only turn out to be justified if today’s short supply of willing workers becomes a lasting factor in the labour market.
Investment ideas
Chinese bonds offer attractive yields
The Chinese bond market is the second largest in the world. And yet, it has received little attention from international investors until now, even though Chinese bonds represent an interesting portfolio supplement.
News from the financial markets
Emerging markets reappraised
The importance of emerging markets has increased economically and politically in recent decades. Our ranking shows which of them are particularly attractive.
Our View
Let summer begin
With high vaccination rates and restaurants open, the next phase of the post-pandemic recovery has begun. As welcome as this development is, it is causing headaches for the central banks in the advanced economies. Can they manage an orderly exit of their extraordinary monetary policy?
Our View
Good news, but too much at once?
Full order books in the manufacturing industry, consumers eager to spend and the prospect of easing: The economic recovery is picking up speed. So much so that there are bottlenecks in the supply chains and prices are rising. This is where the Fed comes into play.
News from the financial markets
Manufacturers face component shortages
Reports of scarce raw materials and components abound, and apparently the economic upswing is being restrained as a result. In the following, we discuss the reasons for the multitude of supply bottlenecks, the risks arising from the related shortages, and the consequences this unusual development can have for companies and investors alike.
Our View
Vaccination progress sets the pace
One year after the start of the Corona pandemic, it is still dominating our lives and the financial markets. What matters now is the vaccination rate. The faster the vaccination, the better.
News from the financial markets
From cash to digital euro
Various central banks are looking into the possibility of introducing their own digital currency. The concepts differ considerably in some cases. The European Central Bank (ECB) wants to make the digital euro available to companies as well as private individuals. Is that a bridge too far?
Investment ideas
Stocks for the post-Covid economic upswing
Although equity markets have already risen, the impending economic recovery still presents investors with compelling opportunities.
Our View
Why rising interest rates are a good sign
The rise in interest rates in recent weeks has raised questions. Was the increase driven by growth optimism or inflation concerns? Are higher interest rates putting the brakes on the equity bull market? These questions will shape the discussions among investors in the coming weeks. In our view, the positive interpretation will prevail.
Investment ideas
Higher potential return despite lower risk
It pays to think outside the box. Although credit spreads on Corporate Bonds have narrowed con-siderably of late, Insurance-linked Securities continue to afford an attractive yield profile as well as an interesting means of diversification. Moreover, thanks to their variable coupons, they protect against interest rates risk.
Our View
The Fear of missing out
Extreme price swings as in the US stock Gamestop and contagions with the mutations of the Corona virus are a reminder to protect the portfolio for short-term setbacks.
Investment ideas
Use dividends as a guide
The economic fallout from the global health crisis has hit dividend investors particularly hard. Concerns about yet another difficult business year have led to a sharp drop in dividend expectations, especially in Europe – too sharp, in our opinion.
News from the financial markets
Is inflation on the verge of flaring up?
Across the globe, central banks and govern-ments have deployed immense sums in effort to counter the economic fallout from the corona-virus pandemic. As a result, some investors are fearing that a significant rise in inflation lies ahead. We believe this is premature. Nonethe-less, demographic change could itself lead to higher inflation rates.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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?
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.
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.
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.
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.
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.
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.”
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.
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.
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.
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.
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%.“
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.
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.
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.
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.
2017
Economic outlook
Economic Outlook
The global economy is on a recovery track. However, expectations should not be set too high.
Economic outlook
Economic Outlook
The world economy is showing somewhat stronger momentum this year and will register a higher growth rate than in 2016.
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?
Economic outlook
Economic Outlook
The world economy is showing somewhat stronger momentum this year and will register a higher growth rate than in 2016.
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.
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.
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.
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.
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.