Horizon Handout February 2024

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


  • Germany's economy shrank by 0.3% in 2023. The economy is also suffering from economic policy.
  • The US economy is cooling down. However, the landing should be quite soft in the year of the presidential election.
  • Inflation has fallen significantly. There is less pressure on central banks to act – but when will key interest rates fall?


  • Trend reversal at the start of the year after last year's strong rally only short-lived. S&P 500 reaches new all-time high.
  • Valuation expansion despite rise in yields. Limited potential for strong valuation expansion without a sharp interest rate cut.
  • Opportunities in small cap stocks and quality growth stocks, which offer relative catch-up potential if rates no longer rise.


  • The robust US economy and stubborn inflation on both sides of the Atlantic are dampening expectations of interest rate cuts.
  • Spreads in the IG and HY segments have recently fallen again due to high demand and a lack of new issues.
  • EM spreads remain stable despite negative inflows, supported by technical factors.

Alternative investments / commodities

  • OPEC tries to counter restrained demand in the short term. US production likely to grow slowly this year.
  • After all time high, gold burdened by dumped hopes of interest rate cuts. ETF positioning continues to decline.
  • Industrial metals continue to move sideways. Structural "green" tailwind temporarily overshadowed by weak industrial activity


  • The euro benefits when there is less demand for the US dollar. But there is no real euro strength in sight.
  • The US dollar is benefiting from its status as a "safe haven" and remains structurally strong.
  • The strong Swiss currency seems to be getting scary for the central bank – the franc is weakening slightly.