Market Monitor 6/2018

Particular caution is required!

The global economy continues to grow positively despite regional slowdowns. Rising inflation is within the target of 2%, so that the pragmatic normalization of monetary policy can continue. The unemployment rate is falling and in some places even full employment prevails. Corporate earnings for 2018 are expected to grow at a double-digit rate. Actually, in this environment investors should be confident, if there was not Mr. Trump, who is arguing with the rest of the world. He wants to renegotiate the unfair trade contracts and harshly takes a first extreme position. In doing so, he neglects to add services and direct investments to trading goods in the scale pan. In addition, globalization has led to cross-border production processes and thus the origin of many goods can no longer be clearly assigned to one country. In any case, the US has abruptly broken ties with friend and foe built over many years, and the world still does not know where all this will lead to. Due diligence now requires of every manager to be more cautious about projects and hiring staff or even postpone them. This, combined with the liquidity reduction of central banks, leads to a reassessment of the situation, which can vary widely depending on the development of the trade dispute.

In this uncertain market environment with strongly diverging scenarios, a cautious investment quota is recommended.