Strong start to the year does not make central bankers’ task any easier
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Long View Q2: The risk of the ‘new normal’
In this report, we present the DWS long-term capital market assumptions for major asset classes as of the end of June 2022 while exploring the risks to these forecasts.
Our monthly market analysis and positioning
The past month, and indeed the entire first quarter, has been dramatic in every respect. The invasion of Ukraine by Russian troops not only revealed that German politicians in particular had been mistaken about the Russian leader, Vladimir Putin. It
How inflation turned out to be anything but transitory
German consumer price rises hit a 42-year high, and probably have not peaked yet In Germany and elsewhere, inflation has accelerated and will probably continue to do so for quite a while. Each new inflation release increases pressures on central
ESG is quality, it just isn’t really
In the past decades, humankind has been facing evermore alarming events which have shifted our consciousness towards more sustainable thinking. Natural disasters, such as immense bushfires in Australia, countless floods throughout Europe, Asia and the US or social disasters, such
Long View – The return implications of climate risk
The Russo-Ukrainian war is dominating news headlines as well as financial markets. Any short-term forecast is subject to a high degree of uncertainty, given the risks surrounding the course of the war and the impact of sanctions and countersanctions. Contrastingly,
Carbon markets: The why, what & where
In this paper we provide a guide to carbon and their trading systems. We pay particular attention to the scope and breadth of carbon schemes and why they are an important part of achieving net zero.
2022 Outlook: It hinges on putting inflation back in the bottle
Another good year for investment returns ahead, if inflation trends downward Enormous fiscal stimulus, funded by monetary policy, and pandemic induced supply-side challenges pushed inflation to its highest level in nearly 40 years. This poses risk to cycle longevity and
A red wave at the US midterms?
It’s a bit early to say how next year’s mid-term elections will go. That’s doubly true in terms of potential market implications. U.S. electoral history and some early signs in the data suggest that Republicans should do reasonably well in
Investment Traffic Lights December 2021
New Omicron virus mutation and a hawkish Jerome Powell turned November into a rather negative month for most asset classes. Whether this is considered a good entry point largely depends on one’s assessment of Omicron and inflation. At this point
November Investment Traffic Lights
CIO View October has seen new record highs and record returns Events were less friendly to bonds, as inflation fears are prompting central banks to act sooner than expected Many investors are hopeful of the traditional year-end rally, but the
Bundesbank chief Weidmann to step down
Bundesbank President Weidmann today surprisingly announced his resignation at the end of 2021 and gave personal reasons for this decision. Jens Weidmann was considered a proven monetary-policy hawk within the Governing Council of the European Central Bank (ECB). During his
Beware nitrous engine damage
Will price hikes be the next S&P EPS leap?: Beware nitrous engine damage This earnings season, we expect S&P 500 companies to beat analyst earnings estimates by more normal amounts; by roughly 5% in aggregate, not 20%+ like the last
German voters’ mixed verdict
Germany’s voter have spoken. And, compared to other countries, traditional parties of the political center have done quite well, overall. But what government exactly the electoral verdict will translate into is likely to remain unclear for a while yet. Both
For our 12-month outlook we remain cautiously optimistic
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
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
Another amazingly good quarter. What next?
The markets easily withstood many adversities in the summer. In the coming twelve months equities and real estate remain our favorites, though their potential returns are only moderate. Asurprisingly good quarter is behind us. Despite the delta variant, the U.S.-China
china and the US move apart
A more complex relationship with a global impact 1 / It started with a trade war… 2 / …and has shifted to technology and human rights 3 / Regional political relations are becoming more complicated, too 4 / The battle
Long View Q2: the impact of rates on returns
1 / Summary Within this report, we present the DWS long-term capital market assumptions as of the end of June 2021 for major asset classes. As the world has continued to rebound strongly from the COVID-19 crisis, global risk markets
China Has A (Regulatory) Plan
China increases regulatory pressure as part of its new five-year plan. By tightening the regulation of education providers on July 23, the Chinese government dealt another blow to investors. Individual stocks in the sector lost over two-thirds of their market
Things are so good that it’s time for a break
A buoyant economic recovery, record stock markets and calm bond markets. Things have been going all too well and the next surprises are unlikely to be positive. Global economic growth is slightly up, so are equity price targets, though, we see
Blue economy: A new twist in an old tragedy
Markets and policymakers are finally waking up to the challenges and opportunities of protecting marine ecosystems, while simultaneously promoting sustainable development. It sounds like small fish. Back in 2017, the Seychelles put the finishing touches to a marine conservation scheme
Long View – Inflation
As regions across the globe emerge from the COVID-19 pandemic, there is a growing sense of optimism about economic acceleration. The strength in global PMIs and measures of consumer confidence (such as the University of Michigan consumer sentiment and the
From “fad” to fact
Joe Biden’s inauguration looks increasingly likely to mark a sea change for sustainable investing. This could have lasting implications well beyond U.S. shores.
Commodities and bond yields have risen sharply in February
How would investors have positioned themselves if they had correctly foreseen the course of the Covid-19 pandemic twelve months ago? Global equities (MSCI AC World Index) had already fallen by 14% in February 2020. In March, they fell by …
The green decade
There is no shortage of challenges for long term investors. The strong performance of risk assets in 2020 has further compressed return expectations, and there exists ongoing concern about (i) how economies will emerge from the current crisis …
ESG in Strategic Asset Allocation
A Practical Implementation Framework December 2020 Much research has been made in the past few years about how to integrate ESG in various asset classes; however, ESG research on a total portfolio level—or strategic asset allocation (SAA) level—is still very
Our 12-month Economic & Market Outlook
Would our annual outlook for 2021 have looked different if we had written it in mid-October? Yes, but only in part. Little would have changed in our economic forecasts but our asset-class outlook would have been different. What has taken
October started strongly but ended weakly as Covid concerns rose again.
"After all, it is difficult to determine which election outcome the market had priced in, when and with what probability. "
Strong S&P 500 EPS Results for the Third Quarter
Strong S&P 500 EPS Results for the Third Quarter, Probably the Best of the Year CIO | View – Americas CIO View Powerful direct fiscal assistance to small businesses and households, forbearance programs, business reopening's and warmer weather all helped
The future of office spaces
Contrary to common fears, Covid-19’s long-term effect on office demand might actually be accretive, or at least not destructive. Many observers have claimed that the pandemic has revealed city-center offices to be relics of the 20th century. We take a
CIO View – Investment Traffic Lights
MARKET OVERVIEW In August, investors were risk-on and helped the stock markets in particular to some new record highs. The economic recovery continues to progress but is losing some of its momentum. From a strategic point of view we see
DWS Long View – Q2 2020 update
Within this report, we present the DWS long term capital market assumptions1 as of the end of June 2020 for major asset classes. Back in April we published a report analyzing the impact of the COVID-19 pandemic on long-term return
No Recovery Yet
Crude continues to oscillate, as the pace of economic recovery and uncertainty over lifting or re-imposing lockdowns drive market sentiment. A weaker U.S. dollar, negative real interest rates and uncertainty amid the coronavirus pandemic are propelling gold prices. We expect
Covid-19 And The Internet Of Things
Conventional wisdom has it that Covid-19 will speed up familiar trends, such as those toward automation and digitization. A closer look at one of the supposed beneficiaries, the Internet of Things, suggests a more nuanced picture. The ultimate outcome may
Big Numbers Alone Make No Proper Monetary Policy
Aggressive interest rate cuts, liquidity provisions and quantitative easing worked well. Buying facilities rather serve as a backstop. Based on a diminishing marginal effect from Large Scale Asset Purchases (LSAP), the Fed might do more for longer to support
How a virus may speed up the energy transition
What the last few months taught us about winners, losers and survivors in European electricity markets. The Covid-19 pandemic already looks set to cause the biggest drop in global energy demand in modern history in 2020. Especially in Europe, the
Passive Investing 2020 – Addressing climate change in investment portfolios
This 2020 global survey is part of an annual research programme by DWS and CREATEResearch. It is designed to highlight the forward trends in passive investing. This year’s survey looks at how pension investors are using passive funds to deal
Almost back to normal
The world is going through its most severe recession since the Second World War. Unemployment and short-time working1 are at record levels in many countries, rating agencies are lowering their ratings at record …
Optimism Overdone
We are cautious about the oil price after its rapid recovery. A weaker dollar, low real interest rates and higher inflation expectations are likely to support gold. We reaffirm our belief that China will meet the requirements of the phase-one
At a turning point
Five months into the Covid pandemic, there are signs of improvements. The risk of setbacks remains high, however. Globally, infection rates remain worryingly high. In developed markets, a resurgence in outbreaks appears likely. Despite recent progress in containing Covid-19, the
Back to normal. But what is normal?
The record market slide has been followed by record-breaking stimulus – and a superfast rally. The economy is yet to follow. Coronavirus and its repercussions continue to dominate people's lives, the economy and stock markets. The calming in continental Europe's
Green, healthy buildings as economic stimulus
EU policy recommendations on starting a paradigm shift We welcome the EU’s intention to ‘Rebuild Europe’ by accelerating gren building renovation1 to support economic recovery, to support our health2 , to reduce carbon emissions and improve energy security.
Layers of Uncertainty
US Economic Outlook As an economist one has to live with uncertainty. Perhaps, that is why many economists have fallen in love with statistics and mathematics, as they promise at least some clarity. And, depending …
Ready or not, normal here we come: but hard to find for many
Americas CIO View The severe economic damage of widespread non-essential activity lockdowns to U.S. and European economies is moving behind, but we expect a slow recovery with elevated …
Post the Oil-Price Inflection
CIO Commodity Commentary Oil is again trading near its five-week high, with a West Texas Intermediate (WTI) price of around 29.5 dollars per barrel – a bit higher than half its end-February level. After April's rollercoaster …
DWS Long View: The impact of COVID-19 pandemic on long-term return forecasts
Entering 2020, the long-run return forecasts across asset classes left something to be desired. The rich valuations meant that investors could only expect low returns from most asset classes going forward. A lot has changed with the …
A downturn unlike any other?
Quarterly CIO View Around the globe, the rapidly spreading Coronavirus has created unprecedented political, public-health and economic crises. Not that you would necessarily know, if you had fallen asleep in mid-February and were only now checking …
COVID-19 and the financial markets Spotlight: Fixed Income
While the numbers of new infections and related fatalities are growing with slowing momentum, the discussion around the pace and scope of easing lockdowns becomes increasingly heated. Latest GDP figures and rising unemployment rates are among other figures fueling the
Living in history: how will we look back at this moment?
Pandemic 2020: a passing moment or a new era that shapes our future? New cycles tend to bring new trends, themes and investment leadership. First-quarter earnings season and preliminary economic reports confirm recession. David Bianco Prevention measures will shift to
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