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US consumer spending has stagnated recently

Over the past few weeks, cyclical assets such as industrial metals and the Dax have outperformed the market, in line with a series of better than expected economic data The stabilisation of earnings estimates recently and the better-than-expected Q2 reporting season so far have also supported equity markets. In absolute terms, however, Q2 results look poor compared to the previous year. The S&P 500 is expected to see earnings plunge by more than 40% y/y. The low equity positioning of many market participants, the predominantly pessimistic investor sentiment and globally low interest rates…

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Learning to live with the virus. Economic and political outlook for 2H 2020

The worst is over in the advanced world – as long as sufficient caution prevails to contain virus outbreaks. Three major assumptions...

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The upturn has started

Stock markets are again approaching their interim highs of early June, driven by vaccine hopes and positive economic surprises.

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The trend for economic surprises is upwards

European stock markets are again approaching their temporary highs of early June, driven by vaccine hopes and positive economic surprises. In absence of an unanticipated exogenous shock, we believe downside potential remains limited. Investor

sentiment is still not euphoric, most brokers are cautious in the short term and investor positioning remains muted. A lot of money is parked on the sidelines, which is gradually being put back into play. Money market funds, for example, have

recently recorded the largest outflows since December 2019, and money supply growth fuelled by central banks is…

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Q3 2020 | Recovery

An appreciable recovery from the deepest recession since the 1930s began in May, supported by aggressive monetary and fiscal policy.

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Capital Markets Outlook by Berenberg’s Wealth and Asset Management

Compact outlook on capital markets, the economy, equities, bonds, commodities and currencies. New every month.

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Investors expect high volatility until after the us elections

The last two weeks have shown that volatility remains high and is unlikely to fall back to pre-crisis levels any time soon. With the upcoming reporting season, continuing geopolitical and trade uncertainties, the ongoing corona crisis and the US

presidential election due in early November, there are a lot of stumbling blocks ahead. At the same time, the market is supported by the fact that many bears remain underinvested in equities, in addition to the support from central banks. Further,

economic data have tended to surprise upwards recently. In addition to all the downside risks, there are…

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Berenberg and Moonfare launch private equity platform for private customers

Hamburg/Berlin. 430-year-old private bank Berenberg and digital private assets investment platform Moonfare, founded in 2016, start a partnership to provide Berenberg customers with digital access to top-tier private equity funds.

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Europe has catch-up potential if the global economy picks up

Underinvested investors continue to suffer. The "pain trade" to the upside has continued. In particular, regions and sectors that had previously underperformed have gained. Cyclicals were the relative winners. The DAX rose strongly and the US dollar depreciated. This was in part due to: substantial fiscal stimuli in the eurozone and Germany, the continued support of the ECB, and systematic investment strategies that rely on momentum which have further increased their equity exposure. Many discretionary asset managers increased their equity positions after exceeding the important 200-day lines…

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ESG ratings often inadequate

Hamburg/Frankfurt. When assessing a company’s sustainability in terms of ESG (environmental, social and governance standards), many asset managers rely heavily on scores by external rating agencies. However, a study by Berenberg’s ESG Office has shown that many of these ratings are inadequate and only partially reflect real-life circumstances. Particularly smaller companies tend to receive a poorer rating, often preventing investors from recognising investment opportunities. Consequently, ratings should only be used as an indicator in an ESG analysis and cannot replace the need for the…

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Capital Markets Outlook by Berenberg’s Wealth and Asset Management

Compact outlook on capital markets, the economy, equities, bonds, commodities and currencies. New every month.

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Silver steps out of the shadow of gold

Despite increasing risks, stock markets remain stable. Coronavirus is still spreading and the global economy is expected to recover modestly. A Brexit deal seems difficult at the moment, the risk of a "cold war" between the US and China is increasing and the US presidential elections in November will provide additional uncertainty. However, investors seem to be looking further ahead and are driving valuations to levels not seen since the tech bubble. Positioning is extremely concentrated. Growth, technology and pharmaceutical stocks as well as defensive investments are in demand. Investor…

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Sell in May? Weak start to the year tends to be good for summer months

The disconnect between negative economic data and rising stock markets (Nasdaq 100 is now back in positive territory since the beginning of the year) has continued. Nevertheless, the downward potential for the market should remain limited. The very negative sentiment that has remained supports this view. There are currently 29 percentage points more bears than bulls among US private investors. The put-call ratios have risen in line with this as investors have begun to increase their hedges again. Investors have recently sold equity funds and ETFs, while more than USD 1 trillion has flowed into…

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Capital Markets Outlook by Berenberg’s Wealth and Asset Management

Compact outlook on capital markets, the economy, equities, bonds, commodities and currencies. New every month.

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A good sign? Sentiment among US private investors is very pessimistic

Stock markets continue to be relatively stable despite catastrophic economic data and numerous corporate profit warnings. Not even a temporarily negative WTI oil price led to a sustainable sell-off. In our view, the already negative sentiment and the light positioning of investors make a sharp slump unlikely, at least in the short term, unless something unexpected for markets should happen. This could include, for example, an unexpected escalation in the trade dispute between the US and China or a second, violent wave of coronavirus infections. However, after the strong equity rally over the…

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Berenberg arranges institutional debt solution for 10 new trainsets

Hamburg. Berenberg arranges a EUR 70 million rolling stock institutional debt solution with the aim to fund new rolling stock vehicles for a German regional passenger rail (SPNV) franchise. A group of investors represented by Allianz Global Investors (AGI) is acting as long-term lender. The funds are used to purchase of 8 DMUs and 2 EMUs to be operated in Mecklenburg-Vorpommern, Brandenburg and Berlin.

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Refinitiv Lipper Fund Awards: “Berenberg-1590-Aktien Mittelstand” best German second-tier equity fund

Hamburg/Frankfurt. Fund rating agency Refinitiv Lipper has named the “Beren-berg-1590-Aktien Mittelstand” fund managed by Andreas Strobl the best fund in Europe in the category “Equity German Small & Mid Cap” in recognition of its outstanding performance over three years.

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Investors have sufficient dry powder

Why don't share prices continue to fall - after all, a severe global recession is looming and corporate profits are collapsing? Many investors are accordingly cautious and brokers are pessimistic. The consensus is that the old lows of mid-March will be tested at least once again, if not fallen below. If everyone runs in one direction, however, this increases the likelihood of being caught on the wrong foot. Stock markets have risen sharply recently, and the DAX is also back in a bull market after a recovery of more than 20%. And now the first systematic strategies that rely on price momentum…

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Capital Markets Outlook by Berenberg’s Wealth and Asset Management

Compact outlook on capital markets, the economy, equities, bonds, commodities and currencies. New every month.

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Severe daily fluctuations in the S&P 500 – easy go easy come?

After sliding into a bear market at record speed, the S&P 500 last week posted its strongest three-day rise since the 1930s. As absurd as it may seem, the Dow Jones has risen more than 20% from its low and has already started a new bull market. Is it a bear market trap or something more sustainable? No one can know for sure. While stocks have certainly priced in a huge amount of bad data, nothing can compare with the coronavirus in terms of the severity of the shock to the economy. In the short term, the further path of the stock markets depends strongly on the duration of the corona shock. It…

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GlobalCapital ECM Awards: Berenberg best bank for Small Cap ECM once again

Hamburg. Privately owned bank Berenberg has won an award as the “Best Bank for Small Cap Equity Capital Markets” (ECM) for the third consecutive time. GlobalCapital, the specialist magazine belonging to the Euromoney Group, awarded the distinction as part of its Annual Equity Capital Markets Awards, which recognises outstanding achievements in the EMEA region. Berenberg was additionally named among the top three ECM banks in the GSA region.

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Severe Shock

The spread of coronavirus is a severe, but temporary exogenous shock to the economy that is being exacerbated in the short term by the drop in oil prices.

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Stock market already pricing in mild recession scenario

The spread of the coronavirus and the oil price war following the failure of the "OPEC+" talks have led to massive market distortions. The S&P 500 has fallen by more than 20% from its peak about three weeks ago. It recorded the first bear market since the financial crisis - and at record speed. At times, Brent oil fell more than 30% in one day, stock indices saw daily losses of more than 10% and credit spreads skyrocketed. When will the market find a bottom? In our opinion, there must be four P's: positioning, profitability, policy support and panic. Positioning in risk assets is now low for…

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