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Q4 2020 │Vaccination hopes

If a coronavirus vaccine is approved, a globally synchronised recovery will probably become the dominant theme for capital markets.

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Volatility has increased In August, especially for the Nasdaq

We consider the recent correction in the overheated and in part ambitiously valued US technology sector to be healthy. In addition to some profit-taking after the strong rally, the options market bore some responsibility for this. With their call bets on rising prices, US private investors forced market makers to hedge against further rising markets in the form of stock purchases, which intensified the upward pressure and led to increased volatility. When the reversal occurred, these hedges were reduced and the feedback loop had a strengthening effect on the downward movement. We believe the…

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Breather and rotation

The recovery of the stock markets has taken a breather – the summer was lacklustre, as we expected. While in the last few

weeks there was initially a clear upward trend at first, there has recently been a significant setback.

 

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Capital Markets Outlook by Berenberg’s Wealth and Asset Management


The golden age continues

“Towards gold throng all, to gold cling all, yes all” – after a rise of 20% in euros, this Goethe quote seems to be proving true again. Gold is one of the bestperforming assets this year. In view of the significant economic uncertainty causedby the coronavirus, this is hardly surprising. A look beneath the surface, however, reveals further reasons for this record run. Although stock markets have been recovering rapidly since mid-March, gold continued to surge. But how much more

can it rise? Is it still worth adding gold to your portfolio?

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Berenberg names new managing partners

David Mortlock (45) and Christian Kühn (52) have been appointed 39th and 40th managing partners in the 430 years history of the bank. Mortlock is the first non-German to become a managing partner of Berenberg since its founding in 1590 and will also take a 5% stake in the bank.

 

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US-Megacaps are the dominat performance driver on the S&P 500

Stock markets - above all the US megacaps and cyclicals - have continued to rise over the last two weeks. The Nasdaq, which we described as a "safe haven" at the beginning of February, has seen a return of almost 30% since the beginning of the

year. Their high cash flow generation, strong balance sheets and share buyback programs provide a supportive effect. In some tech segments, however, a great deal (of hope) has already been priced in, so we currently feel more comfortable with

European small caps and cyclical companies. The probability that a Coivd-19 vaccine will be approved in the…

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Berenberg achieves top marks in first UN PRI assessment

Frankfurt. Germany's oldest bank achieved top marks in its first annual assessment of the Principles for Responsible Investment (UN PRI) supported by the United Nations.

 

In the main category ESG Strategy & Governance, Berenberg achieved the highest score of A+. In the other six categories, Berenberg received the second highest grade A. This means that the house, with its very first rating in six out of seven categories, was rated better than the median for all PRI signatories and the participating investment managers.

 

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Biden, Brexit, virus trends, economic outlook

US politics: A tighter race? With roughly ten weeks to go until the US election on 3 November, Biden's lead over Trump in the betting market has narrowed further.

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Important dates to keep in view

Keep an eye on upcoming dates and events throughout the world with direct bearing on the economies and economic developments.

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Eurozone inflation picks up as shops shun summer sales

Two major drivers explain the rise in inflation: 1. non-energy industrial goods and 2. energy.

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COVID-19 Trends in Europe: Assessing the risks

A second wave of lockdowns could derail the economic upturn that started at an impressive speed in May.

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Relative attractiveness of silver versus gold has normalised

The summer remains lacklustre. Over the past four weeks, not only have European stock markets stagnated. Below the surface, however, cyclicals and especially small caps have outperformed more defensive stocks. Positive economic surprises and hopes for a coronavirus vaccine also provided support, as did the continuing scepticism

and cautious positioning of many market participants. Speculative investors, for example, have reduced their equity positioning in futures over the past few weeks. Positions in corporate and emerging market bonds benefitted from a further

narrowing of risk premiums.…

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On our research portal

Every week we present a different chart on current develop­ments toge­ther with our in-depth analysis and offer you our assess­ments.

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On our research portal

Every week we provide you with a fore­cast of the economic develope­ment in the most impor­tant economies.

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On our research portal

As required, we publish in-depth analyses on important individual topics and long-term outlooks such as the Euro Plus Monitor or Strategy 2030.

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Trend towards sustainable investment

So far, the trend towards sustainable investment has been focused primarily on equity markets. Many market participants have attributed greater importance to the analysis of environmental, social and governance (ESG) criteria in equities due to the higher perceived influence and potential share price impact.

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The recovery is underway

The recovery rally on the stock markets has continued at a slower pace over the past four weeks. US equities in particular have gained ground.

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Options markets are also increasingly positioned pro euro

The lackluster summer has already begun. While equity markets rose in the first three weeks of July, partly thanks to a better-than-expected Q2 reporting season, last week brought a correction - particularly in Europe. However, the major US technology stocks continued to rise thanks to good quarterly figures. Political uncertainty remains high, the positive economic surprises of recent months are likely to fade and a renewed lockdown due to a second wave of corona would be fatal for the global economy. Moreover, the August-September period is often weak for equities. Positive drivers would be…

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Capital Markets Outlook by Berenberg's Wealth and Asset Management

Compact outlook on capital markets, the economy, equities, bonds, commodities and currencies. New every month.

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US consumer spending has stagnated recently

Over the past few weeks, cyclical assets such as industrial metals and the Dax have outperformed the market, in line with a series of better than expected economic data The stabilisation of earnings estimates recently and the better-than-expected Q2 reporting season so far have also supported equity markets. In absolute terms, however, Q2 results look poor compared to the previous year. The S&P 500 is expected to see earnings plunge by more than 40% y/y. The low equity positioning of many market participants, the predominantly pessimistic investor sentiment and globally low interest rates…

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Learning to live with the virus. Economic and political outlook for 2H 2020

The worst is over in the advanced world – as long as sufficient caution prevails to contain virus outbreaks. Three major assumptions...

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The upturn has started

Stock markets are again approaching their interim highs of early June, driven by vaccine hopes and positive economic surprises.

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The trend for economic surprises is upwards

European stock markets are again approaching their temporary highs of early June, driven by vaccine hopes and positive economic surprises. In absence of an unanticipated exogenous shock, we believe downside potential remains limited. Investor

sentiment is still not euphoric, most brokers are cautious in the short term and investor positioning remains muted. A lot of money is parked on the sidelines, which is gradually being put back into play. Money market funds, for example, have

recently recorded the largest outflows since December 2019, and money supply growth fuelled by central banks is…

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Q3 2020 | Recovery

An appreciable recovery from the deepest recession since the 1930s began in May, supported by aggressive monetary and fiscal policy.

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