Optimism in the equity markets calls for caution

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 economy more robust than expected, soft landing instead of mini-recession, new upswing in 2024 sales.
  • Europe: Consumer purchasing power recovers, but headwinds for industry from abroad. Stagnation in H2 2023.
  • Inflation declining, interest rate peak (almost) reached. Fed will cut rates from spring 2024, ECB will keep rates stable in 2024.


  • Economic optimism regarding the equity markets continued in July. Equity performance mainly valuation-driven.
  • Cyclical outperformance, continued high positioning and first rifts in the Q2 reporting season make markets vulnerable.
  • We maintain a moderate equity underweight and see an increased risk of a setback in Q3.


  • Price rally in investment grade and high-yield bonds due to declining risk premiums.
  • The rate hikes cycle seems to have peaked. However, high interest rate volatility favours a duration close to neutral.
  • Covered bonds, IG corporate bonds (especially financial bonds) and emerging market bonds in local currency remain attractive.


  • Gold unchanged over July on stronger real interest rates and US dollar. Potential is limited with "soft landing".
  • Oil with recovery due to more pronounced supply deficit. Catalysts increasingly materialised after strong rally.
  • Base metals stabilise on optimism in regards to China's stimulus measures. Clear signals are still necessary.


  • EUR/USD is looking for guidance after the latest ECB and Fed rate decisions and is hovering around 1.10.
  • The BoE's tighter monetary policy is helping the pound. EUR/GBP remains at around 0.86 pound per euro.
  • The Swiss franc remains bearish and continues to push the euro well below parity with an exchange rate of 0.96.