The investors seem to believe in the good deals that the US will achieve in the various negotiations. In May, the S & P500 rose + 2% while the SMI, ESTX50, NIKKEI 225, Hang Seng and IBOVESPA fell between -1% and -11%. The elections in Italy created additional uncertainty. The EUR lost almost 4% against the CHF. The collapse of the Turkish lira with the possible consequences of an additional influx of refugees to Europe probably also had an effect here. Whether the matter can finally be successfully negotiated with North Korea remains to be seen, but anyway the effect on the financial markets was rather small here anyway. Perhaps the Trump administration’s behaviour has led to a constructive destruction that requires a new development for the better in geopolitics and the global economy. However, it is likely that initially most countries will suffer.
Due to such an environment, it seems likely that the economy will cool off more, making a fourth rate hike unlikely this year in the US. A normalization of monetary policy in Europe and Japan will probably take place somewhat later than expected. The valuation in such an uncertain time should be rather low, so that with rising corporate profits the stock exchanges would tend to the side. This, however, according to the chaotic period, with increased fluctuations.