To The Moon

Investor sentiment declined last week across all markets we monitor as investors globally reassess the implications of a second Trump presidency for everything from the strength of the USD, monetary policy, global trade, and their own markets. Only investors in Australia and Japan managed to maintain their recent optimism, though without further gains. The weakening Yen against the US dollar and the perception that Japan will benefit from the US’s trade policy of decoupling supply chains from China under the Trump administration continue to boost sentiment among Japanese investors. Sentiment in other markets ended the week in neutral, with only investors in the UK and Global Developed ex-US maintaining a positive outlook. In contrast, sentiment in China resumed its downward trend, weighed

The recent rise in sentiment that began in early September (excluding China) paused last week as investors tensely awaited the outcomes of the US Presidential election and the meeting of China’s Standing Committee. The previous week’s bullish mood among investors in Asia ex-Japan, Australia, Global Developed markets, Global Emerging markets, and the UK turned neutral ahead of these events, recognizing the binary nature of these potential outcomes. The US Election: Last week, the markets were weighed by anxiety about the US election, largely due to predictions of a very tight race by pollsters – the same ones who forecasted “Remain” and “Clinton” back in 2016. The combination of a deeply divided electorate, sharply contrasting visions from the candidates on America’s future, and the expecta

Blick von unten auf die Hochhäuser von Skyline in USA November holds two major events that could make waves on the stock markets: the US election and the US Federal Reserve decision. The uncertainties are likely to lead to significant fluctuations, it is said. 4 November, 2024 FRANKFURT (Frankfurt Stock Exchange). This week, all eyes are on the US with the election on Tuesday and the Federal Reserve meeting on Thursday. “It is still a neck-and-neck race in the presidential election and also with regard to the majorities in the Senate and the House of Representatives,” notes Ulrich Kater from DekaBank. In such tight circumstances, it could well be that a few days will pass before the election results are clear. “This uncertainty could lead to increased fluctuations on the capital markets.”

Investor sentiment saw a boost last week, with six out of the ten markets we track (Asia ex-Japan, Australia, Global Developed, Global Developed ex-US, Global Emerging, and the UK) closing the week on a bullish note. Japan’s sentiment was also positively influenced by a weakening Yen, nearly reaching bullish levels. In Europe, investors briefly turned bullish but ended the week with a neutral outlook. Meanwhile, sentiment in the US and China remained cautious due to upcoming significant events in these markets: the US elections and China’s Standing Committee meeting. Why are global investors so convinced (bullish) of a good outcome when local investors (US and China) are themselves unsure? The US Election: Investors globally have been increasingly positioning their portfolios for a Trump v

The reporting season and the US election will determine the markets. Major losses on the markets are not expected, but greater fluctuations. 28 October, 2024 FRANKFURT (Frankfurt Stock Exchange). Just over a week to go until the US election - but while the uncertainty on the bond markets is reflected in higher yields, the mood on the stock market remains positive. Although the DAX, S&P 500 and Dow Jones have not been able to continue their record run of late, they are not far below their all-time highs. On Monday morning, the DAX stood at 19,492 points after closing at 19,464 on Friday and reaching an all-time high of 19,674.70. The reporting season reaches a peak this week. In the USA, more than a third of the S&P 500 companies publish their figures, including Alphabet, Microsoft,

The improving macroeconomic environment, marked by lower inflation, reduced interest rates, and the absence of a recession across major economies, continues to support sentiment. Investors in Global Developed Markets are becoming bullish, while those in Global Emerging Markets and Asia ex-Japan are turning positive. However, sentiment in Japan, China, and the US remains affected by the uncertainty of their local political situations, including elections in Japan and the US, and the size of an eventual stimulus in China. Meanwhile UK investors remain bullish about their prospects. Japan: Investor sentiment in Japan declined from bullish to positive last week, ahead of the weekend’s general elections. The ruling LDP party’s newly elected leader and Prime Minister’s gamble backfired, with the

Panoramablick auf die Strasse die vor der Europäischen Zentralbank in Frankfurt liegt Falling interest rates, the first convincing company figures - the stock markets remain in a record mood. Hardly anyone is talking about overvaluation, at most a “certain breathing space” 21 October, 2024 FRANKFURT (Frankfurt Stock Exchange). How are companies performing in the current environment? This question is currently being answered with numerous reports on the third quarter. US companies kicked things off, with SAP starting here today. “The start to the US reporting season has been a success,” comments Ulrich Kater from DekaBank. The major and investment banks in particular have delivered strong quarterly figures and constructive outlooks. He is also optimistic for the coming weeks: “We expect mo

Investor sentiment ended the week bullish in Australia, Japan, and the UK, driven by rising gold prices, a weakening Yen, and decreasing inflation, respectively. In contrast, sentiment in China has turned negative following disappointing macroeconomic data last week. In the US, stronger-than-expected earnings have temporarily halted the decline in investor sentiment, preventing it from becoming bearish, but it remains in negative territory at the week’s end. Elsewhere, Asia ex-Japan, Global Developed and Emerging Markets, and Europe, sentiment remained neutral, possibly in a holding pattern for the rest of the year. This month, the Chinese authorities have shifted from trying to support the stock market ‘passive-aggressively’ to outright ‘aggressive-aggressively’. Unfortunately, their subs

Investor sentiment improved in Asia ex-Japan from bearish to negative, in Japan from neutral to positive, and in Australia and the UK from positive to bullish. Elsewhere, sentiment remained neutral except in the US, where it stayed negative. China: Sentiment in China continues to be driven by the policy response to the country’s declining growth prospects. Last Wednesday’s disastrous press conference by China’s main economic planning agency sent the wrong signal to investors, who responded by selling off recently purchased stocks. Saturday’s press conference by the Ministry of Finance was also long on promises but short on specifics, doing little to assuage investors’ angst. In late August, investors thought the authorities had  discovered that the economy had fundamental problems. It

Investor sentiment weakened slightly across Asia but remained mostly unchanged in Europe and the US, where investors stayed neutral ahead of the Q3 earnings season and the upcoming US elections in less than a month. China was closed for a week-long national holiday and will reopen on Tuesday. In China, the speculative rally driven by cash injections, margin calls, and share buy-backs is likely to resume in the short-term. However, investors will be closely watching this week’s press conference by China’s top economic planning agency for details on the multiple stimuli announced ten days ago. Simply injecting new money into old problems won’t change China’s negative economic fundamentals. Investors will need to see a political commitment to realigning economic resources and a credible rescu