Markets
Stock markets remain stable
The probability of a hard landing for the US economy remains low - if there is no recession in the forthcoming interest rate correction phase, the stock markets should continue to rise.
Interest rate expectations shift to mid-year
In March, the equity markets largely continued their bullish trend from the previous months. However, market expectations of interest rate cuts by the central banks in the USA and the eurozone shifted to the middle of the year.
Stock rally hinges on a few shares
The markets also lacked market breadth in February, and this should continue for the time being: The stocks that are very highly weighted in the indices will probably continue to perform better and the high concentration will therefore remain in the markets.
Good US economic data and AI provide momentum
The stock markets maintained their momentum from the previous month in February and performed very favourably. The continuing enthusiasm for the topic of artificial intelligence drove the markets, as did good economic data from the USA. The markets in Asia also rose sharply. One factor behind this could be the hope that Chinese growth will pick up again.
Market expectations: too optimistic about interest rate cuts?
2024 got off to a positive start: the global MSCI share index gained around 2.85 per cent in the first month of the year, while the DAX rose by 0.91 per cent. The upward trend was primarily driven by the good performance of technology and healthcare stocks.
Positive Momentum
The international stock markets initially moved mostly sideways in January and were able to maintain their positive momentum from before the turn of the year in the second half of the month. Only China, otherwise a strong driving force behind the global economy, is sluggish. And hopes of interest rate cuts turned out to be premature.
What to look out for in stock markets in 2024?
It was an euphoric end for stock markets in 2023. Most of the major stock market indices, including the S&P 500, the Nasdaq, the Stoxx Europe 600 and the Japanese TOPIX, ended the year with a significant gain.
Stock Market Growth Beyond the Magnificent Seven
Quite a few market participants expect the central banks to cut interest rates in 2024, in some cases rapidly. In our view, these expectations are probably too optimistic.
Interest rate optimism supports equity and bond markets
The positive trend on the international equity and bond markets continued in December, albeit not quite as briskly as in the previous month. Market participants expected interest rate cuts against the backdrop of falling inflation data. The US Federal Reserve held out the prospect of this for 2024.
Key interest rate expectations too optimistic?
Looking at the current month of December and therefore also the rest of the 2023 financial year, the positive sentiment should continue. The current year-end rally could therefore go on, but whether this will also be the case in the coming year remains to be seen.
Stock and bond market rally
Falling interest rates and renewed hopes of a moderate change of course by the Fed drove both the equity and bond markets. Investors became increasingly confident that the central banks had reached the end of their cycle of interest rate hikes. Inflation data was lower than expected on both sides of the Atlantic.
Catch-up potential until the end of the year
Looking ahead to November and the remainder of the fourth quarter, we are somewhat more confident than in previous months. A recovery on the markets is possible. Historically, November has always been a positive month after previous losses in August/September/October, based on the US S&P 500 index.
Middle East conflict drives gold price and yields
The conflict in the Middle East weighed on the stock markets and drove up yields on US government and corporate bonds in particular. As a safe haven, gold was in high demand and the price of a troy ounce rose by more than seven per cent.
Opportunities through special situations
Looking ahead to the current month, we remain cautious, even if a short-term recovery (due to market technical factors) is possible. The monetary situation can still be classified as negative. However, if you focus on special situations, you should be able to get through this phase well.
Weak September
September is historically often a weak month in the stock market, and so it also performed negatively this year compared to the previous month. Higher bond yields in the US and Europe as well as a weaker economic outlook in Europe and China weighed on the markets.
Short-term market recovery possible
There are various reasons for a short-term market recovery in September. In the medium term, however, we remain cautious, as economic risks are increasing, not least in Europe. We see potential in Japan and in companies that can benefit from the US Inflation Reduction Act.
Are interest rates about to plateau or peak?
Investors on both sides of the big pond are speculating whether the central banks have now reached the end of their interest rates hikes - especially in the U.S. What does the inverted yield curve mean for investors? Dr. Ulrich Kaffarnik explains what the latest developments mean for investors.
Challenging second half of the year
Looking ahead to August, we remain cautious. After the good performance in many stock markets in the first six months of this year, the next months could be more challenging.
US economy grows strongly
As in the previous month, the international stock markets showed their friendly side in July. Above all, the unexpectedly strong growth of the US economy in the second quarter had a positive effect on the stock markets. In addition, many market participants expect that the central banks in Europe and the USA will not take any further interest rate steps after the interest rate hikes in July.
Liquidity becomes more precious
The bankruptcy of Silicon Valley Bank and the emergency takeover of the major Swiss bank Credit Suisse by its even larger rival UBS have unsettled the markets. While a broad banking crisis is unlikely, other consequences, such as for liquidity and credit, are foreseeable. DJE's banking analyst and fund manager Moritz Rehmann explains how DJE is dealing with the issue.