After the trade conflict is before the trade conflict
In December, the markets reacted with relief to the "Phase One" trade agreement, which is ready to be signed and is intended to settle the trade conflict between the USA and China. At the same time, the EU, especially France and Germany, moved into the focus of US and Chinese trade policy.
Capital market outlook 2020: Politics rules the markets
For the coming year 2020, Dr. Jens Ehrhardt sees good prospects for the stock markets. The stock markets are clearly on green. Ehrhardt sees one reason for this in the US Federal Reserve's expansionary monetary policy, which aims to stimulate the weakening US economy. Another is China's sustained growth.
The ifo business climate index rose again for the first time since March. Other leading indicators such as purchasing managers' indices and incoming orders also rose again. The good mood was also reflected on the stock markets, supported by hopes of a temporary solution to the trade conflict.
The expansionary monetary policy of the central banks supports the stock markets sustainably. What is currently inspiring them, however, is the resilient hope for a temporary end to the trade conflict, for an agreement in small steps between the USA and China. This will solve blockades and make us confident for the coming months.
Tailwind for Cyclical Stocks …
... provided that the US and China can at least reach a provisional agreement on the trade conflict. We think: From this perspective the current situation is better than generally perceived. But no improvement can be expected without an agreement.
Concerted monetary policy
The central banks of the USA and China as well as the European Central Bank relaxed their monetary policy in September. They took various measures by lowering key interest rates, lowering the minimum reserve rate and launching a new bond purchase program, and the international stock markets then made gains.
Trade conflict causes skid marks
In August, the trade conflict between the US and China escalated again, causing a slowdown in economic indicators. Meanwhile, the bond rally continued and gold became more expensive.
August lives up to its reputation of being a weak month for the stock market. That's why the biggest task is to limit losses first. Looking ahead, however, we are confident about fundamental and monetary indicators, most of which are in order.
Once a month Florian Bohnet, Head of Research at DJE, talks about what investors can expect in the coming weeks. A further slowdown is expected in August, and more confidence is expected in September.
Central banks have delivered - and disappointed
As expected, the US Federal Reserve lowered key interest rates by 25 basis points for the first time in ten years, and the ECB was thinking loudly about low interest rates and a possible bond purchase program. But market participants had expected more.