Horizon Handout July 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 an energy crisis looms, at least in Germany. Consumers are worried.
  • Uncertainty is spreading to the corporate sector. Despite good fundamentals, recession now looms.
  • Fighting inflation: central banks must tighten monetary policy even if the economy is slowing down.


  • Optimistic earnings expectations are likely to be reduced in line with worsening economic data.
  • Valuation ratios have fallen across the board. Beneath the surface, there are already favourable equity market segments.
  • Volatility is likely to increase further in Q3. We are betting on a barbell strategy of quality growth and commodity-heavy equities.


  • Yields on safe government bonds were recently under pressure from increasing recession fears. Flattening of the yield curve.
  • Risk premiums for corporate bonds continue their upward trend. EM high-yield bonds increasingly attractive.
  • We are underweight bonds and remain cautiously positioned on credit risk. Short duration.


  • Oil swings between recession worries, China lockdowns and the EU oil embargo. Supply remains tight and prices high.
  • Gold dominated by restrictive central banks. Potential is limited despite high inflation and risk of recession.
  • Base metals are temporarily weaker due to China’s lockdowns. Long-term upward trend is fully intact.


  • Hesitant ECB: Despite the announced interest rate turnaround, the euro remains weak. Other central banks are simply faster.
  • The exchange rate had again fallen to below 1.04 US dollars per euro. A more substantial recovery is difficult.
  • The biggest surprise was the SNB's interest rate hike. The Swiss franc thus strengthened once again.