Sideways with a friendly trend

Companies' appetite for investment is rising steadily, and many firms want to restock in the coming year. This could boost the upswing in 2022. The investment regions of the USA and especially Europe, as well as the banking and energy sectors, are currently attractive in our view.

The Authors

The analyst team at DJE monitors and evaluates the markets on an ongoing basis using the in-house FMM method according to fundamental, monetary and market criteria. They summarise their results once a month.

Statement of the analyst team of DJE Kapital AG


In the past, November was often the best stock market month of the year. A positive factor for the stock markets is the still abundant liquidity in the system. After the unexpectedly strong price development in October, we rather expect a "sideways development with a friendly tendency" for November. The markets are likely to remain well supplied with money in the coming year and, in our view, the economic development in 2022 could also surprise positively. We remain fully invested for the most part and - as in the months before - are focusing on a balanced positioning without too large sector overweights or underweights.


  • Good capital goods activity and
  • Effects from restocking should favour economic development in 2022

In our opinion, the economic development could surprise positively in 2022. Companies' propensity to invest is currently increasing. In addition, many companies are likely to increase their efforts to replenish their inventories in the coming year. Above all, a sustained and good capital goods cycle could lead to a longer upswing than previously assumed. We prefer Europe and the US, whereby earnings development in 2022 could be better in Europe than in the US. Within Europe, Italy currently stands out with above-average growth rates. Although China is currently stabilising, we do not see it as a growth driver for the time being.


  • Higher inflation environment should persist
  • Normalisation of inflation rates in 2022 remains base scenario

The inflation trend will remain one of the dominant topics on the capital markets. Inflation expectations continued to rise last month. However, we still expect the situation to ease, especially from the second half of 2022. Despite the upcoming taper in the US, i.e. the scaling back of bond purchases and possibly the first US interest rate hikes next year, the outlook from a monetary perspective remains positive in our opinion: because there is still a lot of money in the market due to the previous measures. Interest rates should continue to rise moderately, but not to an extent that would be dangerous for the equity markets. We therefore continue to focus on short durations. In the short term, the currently high short positions in bonds could slow down the rise in interest rates or lead to a small setback in yields. In Europe, a tapering discussion is still far away. The loose monetary policy (also quantitative easing(1) should continue in Europe, so Europe appears more attractive from a monetary perspective.

Marktet Technique

  • Deteriorated compared to the previous month
  • But: Fundamental and monetary factors currently predominate

The market technique has deteriorated compared to the previous month. For example, the NAAIM(2) indicator, which measures the investment rates of institutional investors, is currently back above 100% (after 55% at the beginning of October), and the US put/call ratio(3) is again pointing to an overbought market (after a neutral situation at the beginning of October). From an anti-cyclical point of view, the market technique is thus currently not delivering a buy signal, but rather a sell signal. However, one should not overestimate this at the moment, because the trend strength is immense and prevails. The S&P 500(4) and Euro Stoxx 50(5) share indices have just reached new highs and the trend remains clearly upwards.


  • Balanced portfolio is advantageous
  • No excessive overweighting or underweighting
  • Banking sector attractive

We are sticking to a balanced portfolio allocation without too much overweighting or underweighting. Globally, the sectors that outperformed in October were luxury consumer goods (albeit heavily influenced by the Tesla share price performance), energy and banks/finance, as well as selected technology stocks. Energy should remain a good sector from an earnings perspective for the time being and is only moderately weighted among investors. Slightly rising interest rates and possibly improving credit demand should continue to support the banking sector in general. In our view, caution is warranted for highly valued technology and growth stocks. Regionally, we continue to favour Europe and the US over emerging markets.


  • US dollar strength could continue
  • Precious metals and commodities remain under pressure

The recent US dollar strength could continue due to the divergent policies of the US Federal Reserve Fed and the European Central Bank ECB. Commodities and precious metals are generally suffering from the US dollar strength. The oil market could remain tight as some OPEC countries do not increase production more and US producers do not come back into the market more. We are largely neutral on gold, where ETF demand is still not coming back stronger and is even facing additional headwinds from the growing number of crypto ETFs.


1 Quantitative easing refers to an unconventional form of expanding the monetary base (expansionary monetary policy) by a central bank. In this process, the central bank usually buys long-term private or public securities, e.g. government bonds, from the commercial banks. These purchases increase the monetary base.

2 NAAIM (National Association of Active Investment Managers): The NAAIM exposure index tracks the average exposure of its members to the US equity markets. The NAAIM index is not forward-looking, but provides insight into the actual adjustments that active risk managers have made to client accounts over the past two weeks.

3 Put/call ratio = ratio between call and put options. If put options predominate, the prevailing opinion is that this indicates negative market sentiment (stock market sentiment). If, on the other hand, call options predominate, this indicates a positive market sentiment from this point of view. In fact, a rise in prices can often be observed after high put-call ratios. The PCR is therefore considered a contra indicator. It should be noted that under normal conditions fewer put options are demanded than call options; a balanced PCR close to 1 is therefore already considered an indication of slightly negative market sentiment.

4 S&P 500 (also Standard and Poor's 500) = Stock index comprising the shares of 500 largest listed US companies by market capitalisation. Along with the Dow Jones and Nasdaq, it is the third major US stock market barometer.

5 Euro Stoxx 50 = most important stock index in the Eurozone, it includes fifty large listed companies from all economic sectors. The Euro Stoxx 50 has become the leading stock market barometer in Europe and is considered an indicator for the development of the European stock market.


Note: All information published is for your information only and does not constitute investment advice or other recommendation. Long-term experience and awards do not guarantee investment success. Securities are subject to market-related price fluctuations which may not be compensated for by the active management of the asset manager or investment advisor. This information cannot replace a consultation. All information has been provided with care and to the best of our knowledge at the time of preparation. Despite all due care, the data may have changed in the meantime. Further information on opportunities and risks can be found on the website The sales prospectus and further information are available free of charge in German from DJE Investment S.A. or at The fund management company is DJE Investment S.A. DJE Kapital AG is the distribution agent. A summary of investors' rights can be obtained free of charge in German in electronic form on the website at The funds described in this marketing document may have been notified for distribution in different EU Member States. Investors' attention is drawn to the fact that the relevant management company may decide to withdraw the arrangements it has made for the distribution of the units of its funds in accordance with Article 93a of Directive 2009/65/EC and Article 32a of Directive 2011/61/EU.