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.

DOSSIER

RESPOND TO THE ARTICLE

Legal disclaimer

This document is an advertisement. Unless indicated otherwise, source: Erste Asset Management GmbH. The language of communication of the sales offices is German and the languages of communication of the Management Company also include English.

The prospectus for UCITS funds (including any amendments) is prepared and published in accordance with the provisions of the InvFG 2011 as amended. 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 conjunction with the InvFG 2011.

The currently valid versions of the prospectus, the Information for Investors pursuant to § 21 AIFMG, and the key information document can be found on the website www.erste-am.com under “Mandatory publications” and can be obtained free of charge by interested investors at the offices of the Management Company and at the offices of the depositary bank. The exact date of the most recent publication of the prospectus, the languages in which the key information document is available, and any other locations where the documents can be obtained are indicated on the website www.erste-am.com. A summary of the investor rights is available in German and English on the website www.erste-am.com/investor-rights and can also be obtained from the Management Company.

The Management Company can decide to suspend the provisions it has taken for the sale of unit certificates in other countries in accordance with the regulatory requirements.

Note: You are about to purchase a product that may be difficult to understand. We recommend that you read the indicated fund documents before making an investment decision. In addition to the locations listed above, you can obtain these documents free of charge at the offices of the referring Sparkassen bank and the offices of Erste Bank der oesterreichischen Sparkassen AG. You can also access these documents electronically at www.erste-am.com.

N.B.: The performance scenarios listed in the key information document are based on a calculation method that is specified in an EU regulation. The future market development cannot be accurately predicted. The depicted performance scenarios merely present potential earnings, but are based on the earnings in the recent past. The actual earnings may be lower than indicated. Our analyses and conclusions are general in nature and do not take into account the individual characteristics of our investors in terms of earnings, taxation, experience and knowledge, investment objective, financial position, capacity for loss, and risk tolerance.

Please note: Past performance is not a reliable indicator of the future performance of a fund. Investments in securities entail risks in addition to the opportunities presented here. The value of units and their earnings can rise and fall. Changes in exchange rates can also have a positive or negative effect on the value of an investment. For this reason, you may receive less than your originally invested amount when you redeem your units. Persons who are interested in purchasing units in investment funds are advised to read the current fund prospectus(es) and the Information for Investors pursuant to § 21 AIFMG, especially the risk notices they contain, before making an investment decision. If the fund currency is different than the investor’s home currency, changes in the relevant exchange rate can positively or negatively influence the value of the investment and the amount of the costs associated with the fund in the home currency.

We are not permitted to directly or indirectly offer, sell, transfer, or deliver this financial product to natural or legal persons whose place of residence or domicile is located in a country where this is legally prohibited. In this case, we may not provide any product information, either.

Please consult the corresponding information in the fund prospectus and the Information for Investors pursuant to § 21 AIFMG for restrictions on the sale of the fund to American or Russian citizens.

It is expressly noted that this communication does not provide any investment recommendations, but only expresses our current market assessment. Thus, this communication is not a substitute for investment advice, does not take into account the legal regulations aimed at promoting the independence of financial analyses, and is not subject to a prohibition on trading following the distribution of financial analyses.

This document does not represent a sales activity of the Management Company and therefore may not be construed as an offer for the purchase or sale of financial or investment instruments.

Erste Asset Management GmbH is affiliated with the referring Sparkassen banks and Erste Bank.

Please also read the “Information about us and our securities services” published by your bank.

Subject to misprints and errors.

Leave a comment Required fields are marked with *

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