Horizon Handout June 2022

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


  • Russia invasion delays recovery. Uncertainty and higher prices weigh on the economy.
  • Price increases continue. Energy and food prices are drivers. Several months of stagflation loom.
  • Central banks are forced to reverse course. Monetary policy is tightened, in Europe however, only moderately so far.


  • Recession worries dominate stock markets, even if hard economic data is still surprisingly positive.
  • Analysts have slightly reduced profit expectations. However, they still expect positive growth for 2022 and 2023.
  • Investor outlook and sentiment have been clouded noticeably. Positive news could provide upward pressure.


  • Safegovernment bonds with tailwinds amid rising recession fears. Flattening of the yield curve.
  • Risk premiums on corporate bonds continue to rise. Emerging market bonds with widening spreads.
  • We are underweight bonds and remain cautiously positioned on credit risk. Short duration.

Alternative investments / commodities

  • Oil embargo is imminent. However, supply is already tight. Prices and volatility are likely to remain elevated.
  • Gold benefits from all kinds of uncertainties. Rising real yields slow it down, but are less dangerous with a restrictive Fed.
  • Industrial metals are temporarily weaker due to lockdowns in China. Long-term supply shortage remains unaffected.


  • The ECB remains hesitant. The euro will therefore probably remain under pressure until the ECB changes its key interest rate.
  • The exchange rate had fallen to below 1.04 US dollars per euro. Last week there was now a recovery to 1.07.
  • After initial gains at the beginning of the war, the yen has dropped significantly. The BoJ is stuck in a low interest rate trap.