DJE Strategie II - DJE Strategie Global A
- As at:
- 1534.02 EUR
- 1633.73 EUR
Monthly comment of the Management Company
In June, the stock markets made good progress. With an increase in height of 6.25% the German stock index rose much stronger than the broad European index Stoxx Europe 600 that gained 2.85%. In the USA the S&P 500 rose only moderately 0.53% whereas in Asia the Hang-Seng Index (Hong Kong) gained 5.03%. Equities worldwide measured by the MSCI World rose 1.19% - all figures calculated on euro basis. As a result of the recovery of the key leading indicators the stock markets performed well. In Germany the purchasing managers' indices for industry (+8 to 44.6) and the services sector (+13.2 to 45.8) improved significantly. The purchasing managers' indices in the euro zone developed similarly positively. The German ifo business climate index also recovered from 79.7 to 86.2 points (roughly the level of October 2008 after the outbreak of the financial crisis). In the USA, too, the ISM purchasing managers' indices recovered to 43.1 for industry and 45.4 for services, but the leaps were not as pronounced as in Europe. A positive surprise was provided by the US labor market data. As the US economy created 2.5 million jobs instead of cutting 8 million the unemployment rate fell slightly from 14.7% to 13.3%. The market had expected almost 20%. Despite the high unemployment rate due to Corona, consumer spending in the US rose 8.2% month-on-month and consumer confidence improved from 85.9 to 98.1 points. The stock markets also received support from the central banks and some governments. For example, the German government passed a new 130 billion euro rescue package and lowered the VAT from 19% to 16% by the end of the year. The European Central Bank in turn increased the volume of its bond purchase program by EUR 600 billion to EUR 1,350 billion and extended its term to June 2021. At the same time, the ECB reduced its 2020 growth forecast for the euro zone to -8.7% and expected a further decline in the inflation rate from the current 0.8% to 0.3% year-on-year. The US Federal Reserve (Fed) announced that it would leave key interest rates at 0% at least until 2022 and continue to buy US government and mortgage bonds with a volume of USD 80 and 40 billion respectively on a monthly basis. The Fed also expected a slump in growth as well as the contraction of the US economy by -6.5% year-on-year in 2020. The US government discussed a new fiscal policy support measure amounting to USD 1,000 billion. A plan for a possible large-scale US infrastructure program of the same amount was circulated among market participants. Although the leading indicators were encouraging the "hard" economic data weighed on the stock markets. In Germany, industrial production fell -18% and new orders for industry and exports slumped by -26% and -24% respectively - both compared to previous month. The unemployment rate also rose from 5.8% to 6.3%, albeit not as explosively as in the USA. Compared to previous month the corona development also weighed on the markets, especially in the USA, which reported 45,000 new infections in one day at the end of June. The bond markets largely moved sideways in June. Yields on 10-year German government bonds fell slightly from -0.40% to -0.45% while their US counterparts remained virtually stable at 0.65% after an interim increase. The price of oil (Brent) rose from USD 34 to USD 42 per barreland the price of gold ounce continued to rise from USD 1,732 to USD 1,784.