08 / 20


The overall market situation has hardly changed since July. The path for risky investments remains on an upward trend thanks to strong support from monetary and fiscal policy and the associated economic recovery scenario. At the Jackson Hole meeting, which this time was held online due to Corona, Federal Reserve Chairman Jerome Powell announced that the Fed wants to keep the US economy "hot" and is prepared to accept a temporary overshooting of inflation. It remains to be seen whether the inflation target of 2% on average can be achieved. The Federal Reserve's "inflation targeting" has been unsuccessful since 2012 - despite massive purchasing programs and interest rate cuts. Since the Covid-19 crisis, however, the government has also been supporting the economy with very generous spending this time. These are often measures that directly benefit the consumer (checks). In addition, the globalization trend has come to a halt due to the Sino- American trade tensions and the Corona pandemic has brought to light the strong and vulnerable dependencies of individual industries on the Chinese market. A repatriation effect or diversification of trade chains could therefore (additionally) make goods more expensive in the future. Like the FED, the ECB has also announced that it will do everything in its power to achieve its inflation target. From the third quarter onwards, the economic recovery after the shortest and strongest recession in history should gather momentum. However, the rising number of corona cases and increased distancing measures in various countries could still limit the extent of the recovery.


The volume traded on the stock markets was low, in line with the summer lull, and the global stock markets were spared major daily movements. Overall, all major indices closed higher again. In the USA, the S&P500 and the Nasdaq technology exchange reached a new all-time (!) record high. The growth stocks from the technology sector are once again the undisputed sector winners this year. The technology sector therefore accounts for over 27% of the S&P500 index which is weighted by market capitalization, and the five largest companies already dominate 23% of the index. In the Dow Jones Industrial, the weight of the popular sector would shrink to 23% due to the planned stock split of Apple. However, the Dow Jones Index will now be adjusted: Exxon Mobil, Pfizer and Raytheon are replaced by Salesforce.com, Amgen Inc. and Honeywell International. Only a few years ago, Exxon was one of the largest companies in the world. Since 2007, the stock market value of the oil and gas giant has fallen from 450 billion USD to 168 billion USD today. Salesforce.com shares, on the other hand, have risen 27-fold since the financial crisis in 2009. The company is operating in the rapidly growing cloud business. Julius Baer's analysts have calculated that historically, the exclusion of companies from the Dow Jones would lead to an outperformance of the excluded stocks for the next 12 months. Therefore, the decision of additional growth stocks in the Dow Jones could be a contrary warning signal for growth stocks. We have taken a closer look at the outperformance of "growth stocks" in our FOCUS and are correspondingly cautious in that rising interest rates are poison for the highly valued technology stocks (see FOCUS).


The central banks' loose stance on inflation has caused interest rates to rise again for once. As a result, long-term government bonds have lost significant value worldwide. The interest rate structures steepened, in some cases significantly, after Jerome Powell's speech. We are convinced that the risks associated with nominal values will by no means be compensated for by yields. We consider government bonds to be significantly overpriced in view of the danger of rising inflation and the escalating debt policy of certain countries.

Forex & Commodities

The USD continued to weaken, and the silver rally continued, while gold was slightly lower. Cyclically sensitive metals such as copper or iron ore and aluminum rose just as sharply, anticipating the economic recovery.


It can generally be said that after new all-time highs have been reached on the US stock markets, no major gains are to be expected on average in the short term (3-4 weeks). However, it can be historically deduced that new all-time highs represent a positive implication for the development of the next 6 to 12 months. After the very quiet summer months, the US election campaign is getting closer and closer and could provide more movement in the short term. The survey results speak with a slight lead for the Democrat Joe Biden. However, one might remember how unreliable such polls are. The best indicator for the prediction of the next president is the stock market itself. Strong stock markets three months before the elections would speak for a second term of Donald Trump. Conversely, weak markets would favor Joe Biden. We invest selectively in sectors that appear attractive. From today's perspective, we would be more likely to realize further strength and, in view of the autumn months, protect individual positions with stop-loss orders.


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