Erste Asset Management

Stock markets in the corona crisis – Update from the Investment Division

Stock markets in the corona crisis – Update from the Investment Division
Stock markets in the corona crisis – Update from the Investment Division
(c) unsplash
Share post:

What has occurred since yesterday ?

The markets continue to be impacted by the tug-of-war between the economic recovery on the one hand and the rising number of new infections in the USA on the other. Since the beginning of June, (most) important market indices have been in a consolidation phase. An important exception: On Friday the Nasdaq Composite reached a new high with companies such as Apple.

The monthly economic indicators still point to a continuation of the mechanistic, erratic recovery in May and June. Monthly GDP in the UK is expected to rise by 5.5% pm in May after a 20.4% slump in the previous month. In Australia, one indicator of business sentiment in June even exceeded the pre-crisis level (NAB Business Confidence).

As expected, the survey-based indicators for the first weeks of July should show a continuation of the recovery trend. The ZEW report will be published in the morning. This month’s report from the Centre for European Economic Research asks financial market experts for their assessment of the current situation and future developments. Until June, the index on the current situation has remained at a very low level, whereas expectations have already risen significantly. A distinctive improvement in the current situation is expected for July.

At the same time, the situation is worsening on the epidemiological side. Of particular concern is the increase in new infections in some US states. Accordingly, data from Google Mobility Trends already point to a decline in mobility in the southern states (Texas, Arizona, and Florida). In California, at least the rising trend has been stopped. This could also significantly dampen the extent of the economic recovery in the US in the third quarter.

Singapore is the first country to publish an estimate of its gross domestic product for the past quarter. As expected, the slump is enormous. Year-on-year, real GDP fell by 12.6%. This provides a foretaste of the GDP development in the other countries.

Similar to GDP, corporate results for the second quarter also show significant declines. Of the S&P 500 companies, 18 have already published their results. On aggregate, sales fell by 7.7% year-on-year and profits by 11%. The Consumer Services sector stands out. Here sales fell by 15% and profits by as much as 54%.


Legal note:
Prognoses are no reliable indicator for future performance.



Legal disclaimer

This document is an advertisement. Unless indicated otherwise, source: Erste Asset Management GmbH. Our languages of communication are German and English.

The prospectus for UCITS (including any amendments) is published in accordance with the provisions of the InvFG 2011 in the currently amended version. Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in connection with the InvFG 2011. The fund prospectus, Information for Investors pursuant to § 21 AIFMG, and the Key Information Document can be viewed in their latest versions at the web site within the section mandatory publications or obtained in their latest versions free of charge from the domicile of the management company and the domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the Key Information Document is available, and any additional locations where the documents can be obtained can be viewed on the web site A summary of investor rights is available in German and English on the website as well as at the domicile of the management company.

The management company can decide to revoke the arrangements it has made for the distribution of unit certificates abroad, taking into account the regulatory requirements.

Detailed information on the risks potentially associated with the investment can be found in the fund prospectus or Information for investors pursuant to § 21 AIFMG of the respective fund. If the fund currency is a currency other than the investor's home currency, changes in the corresponding exchange rate may have a positive or negative impact on the value of his investment and the amount of the costs incurred in the fund - converted into his home currency.

Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund.

Leave a comment Required fields are marked with *

Your email address will not be published. Required fields are marked *