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The stock markets have had a good start to the year. The majority of the global markets have already experienced a clearly positive development - even if the volatility remains high. We remain clearly overweight in equity with a cyclical bias, even though our vigilance is steadily increasing and our next step will rather be to reduce our the equity quota.

Hamburg. Berenberg strengthens its Investment Banking Division in Continental Europe with two experienced senior bankers: Dominik Bär as Head of DACH Investment Banking and Andreas Franzen as Head of ECM Execution & Structuring in Continental Europe. Bär most recently worked for the American investment bank Lazard as Managing Director while Franzen joins from Deutsche Bank, where he was working in the Equity Capital Market division as a Director.

2020 was a challenging year for financial markets. At the beginning of the year, optimism prevailed. After the US and China signed a trade deal, markets were pricing in a global economic recovery. Many stock indices reached all-time highs in February before the spread of Covid-19 led to a sharp sell-off. A global recession loomed on the horizon. Extremely pessimistic investor sentiment and the courageous intervention of monetary and fiscal policy led to a stock market recovery from the end of March onwards, which until September was mainly driven by Covid-19 beneficiaries, namely the large…

Compact outlook on capital markets, economics, stocks, bonds, commodities and currencies

Hamburg / Frankfurt. The capital market experts at Berenberg are optimistic about the new year. Above all, the return of the USA to a calmer foreign and trade policy under President Biden and an emerging abatement of the Corona pandemic in the coming spring should ensure that the global economy can pick up in the course of 2021 after a still dark winter. Rising corporate profits, loose monetary and fiscal policy, negative real interest rates and high liquidity holdings should support the equity markets in particular. However, exaggerations could occur, so that consistently calm waters on the…

The past year of Covid-19, restrictions and recession should be followed by a year of vaccines, re-opening and economic recovery.

The ECB has delivered on its promise to recalibrate its instruments. The just announced policy package is broadly in line with our and market expectations. Without easing the policy stance further, the ECB plans to extend it beyond mid-2021 to maintain the current favourable financial conditions.

We remain constructive about equities into the new year. We are therefore starting 2021 with a significant overweight position in equities and a more cyclical bias. Nevertheless, we are becoming increasingly vigilant as much has already been priced in and investors have become more optimistic.

After the strong rally in November, many equity regions have barely moved in December - which is perfectly normal after such a strong run. Especially as many investors now want to wait for the central bank meetings in the next two weeks. Movement has recently been seen above all in British stocks.

Baring a major surprise, the ECB will announce a significant policy package next Thursday. Instead of easing its policy stance much further, the ECB Governing Council looks set to extend its current set of measures until at least the end of 2021 to maintain favourable financial market conditions. The ECB will probably also counteract a potential further tightening in bank credit standards and slightly enhance the transmission of its policy stance.

Further progress in Europe and first positive signs from the US: The second wave of the pandemic has receded for the fourth consecutive week in Europe. In the US, the recorded number of infections has also started to fall. However, the US per-capita rate of new infections is twice that of Europe. Despite the progress, daily new infections on both sides of the Atlantic remain well above their respective peaks in March and April.

Trade tensions contained, the pandemic is brought under control, Brexit will be sorted one way or the other. The economic outlook for 2021 is unusually positive for advanced economies and many emerging markets. After a still dark winter, spring and summer should be bright once seasonal factors help to contain the spread of the Sars-CoV-2 virus in the Northern hemisphere.

Compact outlook on capital markets, economics, stocks, bonds, commodities and currencies. New every month.

Further progress in infections: The second wave of the pandemic is receding gradually in major parts of Europe. The number of daily new infections has fallen sharply in Belgium, France, the Netherlands and Spain. Recorded cases have also started to roll over in Italy and the UK. Despite the progress, daily new infections remain at high levels, well above the peak during the first wave. In the US, the pandemic is still getting worse. While the daily number of recorded new cases is no longer rising exponentially in the US, it is now well beyond the European peak from early November on a…