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
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
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
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 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
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
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
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
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
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
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
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 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
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
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
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
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.
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 …
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 …
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
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
"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, 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
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
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
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
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
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
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
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
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
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 …
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
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
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
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.
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 …
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 …
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 …
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 …
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 …
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
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
Investment Insights The ongoing market volatility caused by the COVID-19 pandemic has resulted in record trading volumes against a backdrop of reduced liquidity in all asset classes. Exchange Traded Funds (ETFs) have so far, and once again, proven their resilience
The Fed has expanded the Term Asset-Backed Securities Loan Facility (TALF) in an effort to improve financing for households and small businesses. Liquidity has improved dramatically for TALF-eligible assets now that both dealers and investors know the downside is relatively
Perhaps, it is a sign of the times we live in. Over the past decade, investors have had to get used to the idea of nominal interest rates falling below zero – something economists once thought would be impossible. Could
COVID-19 and the financial markets Spotlight: Fixed Income Various central bank measures and rescue packages have lifted the sentiment on the global capital market in the last days. While the curve of new infections and fatalities is flattening in many
How assessing norm violations in a portfolio context could help avoid risks. The most prominent norm violations typically relate to breaches in human rights, environmental responsibility and business ethics. The sectors most prone to norm violations are energy, consumer staples
The stimulus measures being passed in response to the coronavirus pandemic are unprecedented. However, a recession seems inevitable. Who will ultimately have to bear the costs? The scale and pace of fiscal- and monetary-stimulus measures to support the economy are
Covid-19 is the paramount issue. We expect a sharp economic slowdown in the first half of 2020, followed by a subdued rebound. The coronavirus is likely to slow down the economy in unprecedented ways. Nonetheless, we expect the epidemic to
