Our Monthly Market Analysis And Positioning

DWS
By September 16, 2021 10:40

Our Monthly Market Analysis And Positioning

Welcome to the first issue of the Investment Traffic Lights “Quarterly Edition.” The Quarterly Editions will focus on our strategic twelve-month forecasts that follow our quarterly strategy meetings, which also means that the “Market overview” section will be shorter than usual. August was friendly, which it often hasn’t been in the past. In bonds, little happened overall. Government bonds and investment-grade corporate bonds showed a slightly negative total return, while the high-yield segment, as well as Asian bonds, just made it into positive territory. Commodities fared less well overall.1 Oil, copper, iron ore (-18%) and silver all declined, while coal (+12%) and aluminum fared better.1 Silver is one of the biggest losers for the year, down almost ten percent, while oil remains the reopening winner, up around 40% for the year.1 In August, however, the big winners were equities, many of which hit new record highs. In the U.S. and Europe, they rose for the seventh consecutive month, supported by a good reporting season and central-bank statements that were perceived as dovish overall. Some weaker macro numbers (whether Chinese purchasing-managers’ indices, U.S. consumer confidence or weaker production numbers due to (semiconductor) supply bottlenecks) did not seem to trouble investors too much. After all, the mini economic slowdown gives central banks room not to abandon their loose stance soon. Apart from this the biggest economic policy issue in August was the surprisingly resolute wave of regulation in China, which brought entire sectors to their knees overnight. Beijing did not spare even its own tech titans. The extent to which Washington will follow its example is likely to be keeping some board members in Silicon Valley awake at night.

DWS
By September 16, 2021 10:40

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