Capital Market Outlook of Berenberg Wealth and Asset Management - compact outlook on capital markets, economy, equities, bonds, economics and currencies.
Economics
The US tariffs pose a significant threat to the economic recovery in the Eurozone.
The USA is the main victim of Trump’s tariffs chaos.
ECB and BoE cut key interest rates further, while the Fed’s hands are tied.
Equities
(US) equities are suffering from uncertainty over tariff policy and its impact on the economy and companies.
US earnings expectations and valuations remain stretched despite the recent correction, while Europe is cheaply valued.
A possible slowdown in the US economy in the second quarter and trade disputes could lead to further volatility.
Bonds
Trump's tariff policy jeopardises investor confidence in the USA. ECB remains on cautious course of interest rate cuts.
European corporate bonds recently under pressure from Trump tariffs. Investor uncertainty reflected in outflows.
The emerging bond markets are characterised by Donald Trump's global economic uncertainty.
Alternative investments / commodities
Sideways movement likely. Prices below USD 60/barrel only realistic temporarily or in the event of a (US) recession.
Gold continues to be sought after as a safe haven and reaches a new all-time high. However, risk of a correction is increasing.
Trump's considerable tariff surprises are weighing on industrial metals. However, structural drivers remain intact.
Currencies
Trump tariffs cause US dollar to plummet.
The euro wakes up from its deep sleep.
Beijing uses renminbi to avert damage from trade war.