Leading indicators are recovering

In June some leading indicators such as business climate, consumer confidence and purchasing managers' indices improved, especially in Europe, but also in the US and China. As encouraging as these figures are the "hard" economic data such as industrial production, exports and new orders declined significantly as they had already previous month.

The stock markets made good progress in June. 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 on euro basis.

The good performance of the stock markets is mainly due to the recovery of important leading indicators. 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 improved 43.1 for industry and 45.4 for services but the rises were not as pronounced as in Europe.

Dagegen überraschten die USA mit ihren Arbeitsmarktdaten positiv. Da die US-Wirtschaft 2,5 Mio. Stellen schuf statt wie erwartet 8 Mio. Stellen abbaute, sank die Arbeitslosenquote leicht von 14,7% auf 13,3%. Der Markt hatte mit knapp 20% gerechnet. Trotz der Corona-bedingt hohen Arbeitslosenquote stiegen die Konsumausgaben in den USA gegenüber dem Vormonat um 8,2%, und das Verbrauchervertrauen verbesserte sich von 85,9 auf 98,1 Punkte.

Unterstützung erhielten die Aktienmärkte auch von den Notenbanken und einigen Regierungen. So verabschiedete die deutsche Regierung ein neues 130 Mrd. Euro schweres Rettungspaket und senkte die Mehrwertsteuer bis Jahresende von 19% auf 16%. Die Europäische Zentralbank wiederum erhöhte das Volumen ihres Anleihenkaufprogramms um 600 auf 1.350 Mrd. Euro und verlängerte dessen Laufzeit bis Juni 2021. Zugleich reduzierte die EZB ihre Wachstumsprognose 2020 für den Euroraum auf -8,7% und rechnete mit einer weiter sinkenden Inflationsrate von aktuell 0,8% auf 0,3% gegenüber dem Vorjahr.

Die US-Notenbank (Fed) kündigte an, die Leitzinsen mindestens bis 2022 bei 0% zu belassen und weiterhin monatlich US-Staats- und -Hypothekenanleihen im Volumen von 80 bzw. 40 Mrd. US-Dollar zu kaufen. Auch die Fed rechnete mit einem Wachstumseinbruch und ging für 2020 von einem Rückgang der US-Wirtschaft um -6,5% gegenüber dem Vorjahr aus. Die US-Regierung diskutierte eine neue fiskalpolitische Stützmaßnahme in Höhe von 1.000 Mrd. US-Dollar, und unter den Marktteilnehmern zirkulierte ein Plan für ein mögliches großangelegtes US-Infrastrukturprogramm in der gleichen Höhe.

So ermutigend die Frühindikatoren ausfielen, die „harten“ Konjunkturdaten belasteten die Aktienmärkte. In Deutschland fiel die Industrieproduktion um -18%, und die Auftragseingänge für die Industrie sowie der Export brachen mit einem Minus von -26% bzw. -24% ein – jeweils gegenüber dem Vormonat. Auch die Arbeitslosenrate stieg, wenn auch nicht so explosionsartig wie in den USA, von 5,8% auf 6,3%. Anders als noch im Vormonat belastete auch die Corona-Entwicklung die Märkte, vor allem in den USA, die Ende Juni an einem Tag 45.000 Neuinfektionen meldeten.

Die Rentenmärkte entwickelten sich im Juni weitgehend seitwärts. Die Rendite 10-jähriger deutscher Staatsanleihen sank leicht von -0,40% auf -0,45%, während ihre US-amerikanischen Pendants nach einem zwischenzeitlichen Anstieg mit 0,65% nahezu stabil blieben. Der Ölpreis (Brent) stieg von 34 auf 42 US-Dollar pro Fass, und die Feinunze Gold verteuerte sich weiter von 1.732 auf 1.784 US-Dollar.

Nevertheless the USA surprised positively with its 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 by 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 and projected that the US economy would shrink by -6.5% year-on-year in 2020. The US government discussed a new fiscal stimulus package of USD 1,000 billion and a plan for a possible large-scale US infrastructure program of the same amount was circulated among market participants.

As encouraging as the leading indicators were 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 almost stable at 0.65% after an interim rise. The price of oil (Brent) rose from USD 34 to USD 42 per barrel and the price of gold ounce continued to rise from USD 1,732 to USD 1,784.

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 www.dje.de. The sales prospectus and further information are available free of charge in German from DJE Investment S.A. or at www.dje.de The fund management company is DJE Investment S.A. DJE Kapital AG is the distribution agent.