Low market breadth as a warning signal

Concise summary of the assessments and allocation results of the Investment Committee of Berenberg Wealth and Asset Management – Transparent insights

Published: monthly

At a glance


  • US: Bank quake and higher financing costs send US economy into mild recession. Recovery 2024.
  • Europe: Consumer purchasing power recovers, but headwinds for industry from abroad. Hardly any growth in 2H 2023.
  • Inflation declining, rate peak almost reached. Fed cuts rates from end 2023; ECB tightens further, its rates remain high in 2024


  • Equities in May with performance heterogeneity. Stabilising earnings expectations and AI hype are supporting.
  • Under the surface, investors act more sceptically. Low market breadth and falling net liquidity as risks.
  • We maintain our balanced, non-offensive positioning with a moderate underweight in equities.


  • Government bond yields in sideways trend. Preference for covered bonds over pure government bonds.
  • Financial bonds were only able to shake off the bank worries temporarily. However, we expect catch-up potential.
  • We have continued to increase bonds and duration across segments and are now positioned close to neutral.


  • Gold burdened by real interest rate and USD strength after leap towards all-time high. Potential limited without interest rate pivot.
  • Crude oil prices decoupled from fundamentals. Demand potential in China and services sector with supply still tight.
  • Industrial metals suffer from sluggish economic recovery in China. Long-term upward trend intact.


  • EUR/USD back at 1.07. In the short term, the euro is facing headwinds. However, it should rise again in the course of the year.
  • The pound has strengthened further. Monetary policy is providing tailwinds. EUR/GBP falls back to 0.86.
  • Nothing new with the franc: The Swiss currency remains very strong. EUR/CHF is trading at 0.97, well below parity.