Horizon Handout December 2022

Capital Market Outlook of Berenberg Wealth & Asset Management - compact outlook on capital markets, economy, equities, bonds, economics and currencies.


  • Inflationary pressures remain high and Europe is stuck in the energy crisis. Consumers are unsettled ahead of winter.
  • Early signs of falling inflationary pressures are fuelling hopes that central banks will no longer need to tighten as much.
  • The risks and stress factors are leading into recession, even if labour markets are still robust.


  • Year-end rally so far in tact thanks to hopes of a Fed pivot on falling inflation. Risk of a bear market rally.
  • Valuations have risen. Earnings growth expectations for 2023 still clearly positive despite gloomy economic outlook.
  • The lows should be behind us, even if the way up is not yet clear with central banks remaining restrictive.


  • Safe government bond yields decline. Strongest inversion of the German yield curve in 30 years.
  • Corporate bonds increasingly attractive in the medium term. Emerging market bonds with mixed spread development.
  • We underweight bonds due to government bonds but are increasingly overweight in credit risk.

Alternative investments / commodities

  • Oil with upside potential on China re-opening, end of US strategic reserve release and only mild recession.
  • Gold benefits from weak dollar. Fed pivot needed for uptrend. Relative attractiveness to bonds reduced.
  • 16-point plan in China boosts industrial metals. Inventories low, liquidity very thin. Supercycle remains intact.


  • The euro remains at depressed levels. Uncertainty about the economic consequences of the energy crisis is weighing on it.
  • The somewhat higher risk appetite has slightly weakened the US dollar, allowing the euro to rise above parity.
  • A sustainable upward trend for the euro is not expected until next year, when the winter is over.