Quarterly Market Review with an Outlook.
Zurich, 3rd January 2023
“Recession”. The markets are anticipating a potential change in interest rate policy. Following a market correction over the first three quarters, the fourth quarter saw a turnaround and a strong price rally kicked in. Although the overall situation is still very messy, with the aftermath of the Covid crisis forcing supply chains to reconfigure as well as the Ukraine war, which has resulted in the BRIC states distancing themselves from the USA, the markets appear for the time being to welcome the slight easing in inflation. However, the factors mentioned above conceal some additional inflationary potential. In addition, the declining disposable income available for consumer spending has raised the specter of a general economic downturn.
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Quarterly Market Review with an Outlook.
Zurich, 3rd October 2022
“Pivot or not”. Interest rate policies aimed at combating inflation are fueling the potential for recession. With a removal of lockdowns, China could cause inflation to rise further.
Interest rate policies were intended to tame inflation, but now they are triggering the next recession. Meanwhile, the Chinese economy is increasingly suffering from the lockdowns imposed there. If the lockdowns were lifted, this would boost the supply side, but would also likely trigger a surge in inflation as a result of pent-up demand and higher energy costs due to oil consumption. The question is when the pivot point will come, and what it will look like when central banks readjust their interest rate policies. The stock market will presumably put a stop to the correction initially, before realigning itself.
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Quarterly Market Review with an Outlook.
Zurich, 5th July 2022
“Summer peak.” Inflation has reached record levels, stock markets are pricing in the interest rate hike, yet also hiding potential drops in profits. In this precarious situation, if facts give way to emotions, a bear market rally could occur. However, a summer peak could form in terms of inflation as well, specifically if it is possible to overcome manufacturing bottlenecks. However, given the salary increases that have already been partially implemented by labor unions, inflation could remain an important topic, albeit somewhat less pronounced, for the foreseeable future. At the same time, we can expect the economy to cool down, which brings with it the potential for further market corrections. Although it was less popular during the bull market phase, one thing can make the difference in this type of environment: active stock selection.
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Quarterly Market Review with an Outlook.
Zurich, 5th April 2022
“Turning point.” The conflict between Russia and the West is just the latest in a series of developments that have occurred in recent years: Supplies of vital raw materials are becoming both scarcer and more expensive; coupled with manufacturing bottlenecks due to the pandemic, this is driving inflation even higher. The consumption-based western economy is entering into a period of crisis, as are margins. As a result, market valuations have undergone a correction: Inflation has caused central banks to raise interest rates and, more importantly, sanctions against Russia could call into question the US dollar’s status as the global reserve currency. The framework of the global economy is starting to teeter.
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Quarterly Market Review with an Outlook.
Zurich, 10th January 2022
“D-Time.” Towards the end of the year, an outlook is forming in which inflation takes a prominent role. Politicians worldwide have noticeably more to say than before the pandemic. Lockdowns and quarantine regulations are leading to supply shortages, and at the same time social welfare measures and stimulus programs are expanding the money supply rather than tightening it. Added to this are climate-change measures, which are making energy more expensive and driving inflation even higher. Central banks are being forced into action and are talking about countermeasures. These would deprive stock markets of capital, and consequently nervousness is increasing. It is decision time: Do we move towards administered markets, or do we attempt to make our way back to a free market economy?
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Quarterly Market Review with an Outlook.
Zurich, 6th October 2021
“Wave break” As inflation rises, markets stall. The markets are also taking things into their own hands to a certain extent while central banks are trying to keep the yield curve under control. Whether interest rates continue to rise or not, both instances could result in an ebb in credit expansion. If interest rates increase, it could become challenging for many borrowers; if they decrease, the “margin of error” for credit-expanding banks will shrink and loans will be issued more selectively. Waves break when the height reaches 1/7th of the length. Mountains of debt grow over time before they are reduced in one way or another. Whether or not we are reaching this turning point remains to be seen.
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Quarterly Market Review with an Outlook.
Zurich, 8th Juli 2021
“Have a break”. With lockdowns being lifted in many places, the economy is recovering. Supply side delivery chains can barely keep up with demand, which has been substantial as a result of accumulated savings and pent-up consumer demand. As a result, prices are rising. Stock markets appear unconcerned yet. The situation is coming to a head: will low rates and fiscal stimulus result in untamed inflation or will deflationary forces come back? The markets, being undecided on this point yet, trended sideways in the quarter, with a slight inclination towards strength.
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Quarterly Market Review with an Outlook.
Zurich, 7th April 2021
“A second crutch”. Markets are continuing on an upward trajectory. In contrast to the economy, which continues to struggle. Capacities are still underutilized; the job market is stagnant. The new US government has big plans and is supporting the economy with an unprecedented investment program. In addition to the relaxed fiscal policy, this serves as a second crutch for the faltering real economy.
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Quarterly Market Review with an Outlook.
Zurich, 4th January 2021
“Stumbling blocks”. It was a difficult year, and judging by the signs of the times, things are not set to get any easier, at least not in the medium term. This does not mean that the stock market cannot remain a success story. Imbalances are emerging within society, debt burdens are mounting, and policymakers and central banks alike are doing everything in their power to keep the wheels of the economy in motion. Low interest rates are forcing an increasing volume of capital into high-risk investments. The markets are developing a momentum of their own which could one day encounter a stumbling block that will turn it in the opposite direction.
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Quarterly Market Review with an Outlook.
Zurich, 3th October 2020
“Price & Value”. Dramatic economic slump and the stock is back or close to record levels again. What appears to be contradictory at first sight is a rational adjustment to again lower interest rates and hence an increased lack of alternatives which continues to make equities the asset class of choice.
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Quarterly Market Review with an Outlook.
Zurich, 3th July 2020
“Black & White”. Equity markets have recovered from their lows with vigour, while the interest rates curve as well as most economists suggest only sparse growth for the foreseeable future.
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Quarterly Market Review with an Outlook.
Zurich, 7th April 2020
“Bear attack”. Markets have suffered a heavy blow. Powerful stimulus is on the way and supposed to avoid a deep recession or worse. Bottom line there will be even higher levels of debt, low interest rates and weak growth.
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Quarterly Market Review with an Outlook.
Zurich, 7th January 2020
“Once upon a time”. The final quarter finished what the first quarter started – a stock market’s fairy tale. Investors appear to have forgotten fears of a potential recession and other dangers to end the multiple year bull-market.
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Quarterly Market Review with an Outlook.
Zurich, 11.10.2019
“Illusion vs. reality”. Today’s low interest rate environment suggests sufficient market liquidity – and yet there have been shortages. Risk premiums are likely to be rising.
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Quarterly Market Review with an Outlook.
Zurich, 22.07.2019
“Yin & Yang”. After two quarters of notably down and up moves in markets some stage of balance calmed down things. Most likely not to last for too long.
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Quarterly Market Review with an Outlook.
Zurich, 31-Mar-2019
“New year – same old regime”. The first quarter was marked by recovery from the Q4 correction. The central banks take one step back with liquidity-injection ready in their hands.
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Quarterly Market Review with an Outlook.
Zurich, 28-Dec-2018
“Happy Holidays”. October started the quarter and lived up to its reputation. It came with a correction which went on for the rest of the year and left 2018 with no happy ending.
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Quarterly Market review with outlook. First Quarter comes with overdue correction
Zurich, 28-Sep-2018
“Take a break”. The markets have continued their upwards trend across most sectors. However, some sectors and stocks have since noticeably corrected or have been taking a break.
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Quarterly Market review with outlook. First Quarter comes with overdue correction
Zurich, 02.07.2018
“What goes down must go up”. The rise in the stock market is getting long in the tooth; but this year’s period of weakness has not yet halted the present upwards trend in its tracks. Weiterlesen
Quarterly Market review with outlook. First Quarter comes with overdue correction
Zurich, 30.03.2018
Many have waited long time for the market to correct itself and when it happened, it still came as a surprise.
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Quarterly Market review with outlook. Goldilocks environment and bull market entering final stage.
Zurich, 23.12.2017
Only a few days left until year end. Most likely 2017 won’t change to the worse and many investors will remember it a good year with most markets up much more than expected 12 months ago.
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Quarterly Market review with outlook. Markets likely to correct but uptrend still intact.
Zurich, 24.08.2017
Markets have been relatively slow for the past quarter and mostly traded sideways in consolidation mode. Earlier in the year many have expected a downturn which obviously didn’t take place yet. Weiterlesen
