Perspectives Weekly Investment Outlook: January 20 – Two elephants: tariffs and China growth

In this week’s Perspectives Weekly Investment Outlook podcast, the Private Bank’s Chief Investment Officer in APAC, Stefanie Holtze-Jen, discusses two elephants in current investment markets: China’s growth and how U.S. tariffs are expected to play out in the Asia region.

Stefanie says Asia’s economies are growing more quickly than developed economies and helping to drive global growth. She provides her analysis of China’s three-pillar approach to economic management, what it means for Chinese equities, and how China is preparing for U.S. tariffs.

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Weekly Investment Outlook: January 13 – Tremors in the bond market, and an earnings season preview

Bond markets have kicked off 2025 with “a significant spike in yields, and this is now firmly on investors' minds,” says Dr Dirk Steffen, the Private Bank's EMEA CIO. “Bonds have to be managed very actively.” The bond volatility has been particularly pronounced in the U.K., but Dirk says that the situation there is probably not as severe as the crisis in 2022.

Meanwhile, earnings season kicks off in earnest this week, with a group of results from major U.S. banks. "Elevated yields could be a nice tail-wind” for the banks, Dirk says, and “let's not forget about buybacks,” which could also be supportive. Communications services, financials, IT, and consumer discretionary are all sectors that are likely to show strong earnings growth.

Weekly Investment Outlook: December 16 – The last Fed meeting of 2024

The Federal Reserve is expected to deliver an interest-rate cut this week, but markets may not get as many U.S. rate cuts in 2025 as they anticipate, says the Private Bank’s Global Chief Investment Officer, Christian Nolting. "We do not expect the Fed to cut massively in 2025,” Christian says.

U.S. retail sales figures will be important to watch in the week ahead, because “It’s a very consumer-oriented economy,” Christian says. Markets will also be on alert for a read on U.S. GDP.

Weekly Investment Outlook: December 9 – Jobs data, Fed policy, and the outlook for stocks

A somewhat mixed U.S. jobs report has boosted expectations for an interest-rate cut at the Federal Reserve’s last policy meeting of the year, says Deepak Puri, the Private Bank’s Chief Investment Officer for the Americas. “Given the fact that the unemployment rate went up, the Fed can easily rationalise another rate cut,” Deepak says.

Historically, December has tended to be a good month for the S&P 500, and Deepak says there’s no reason that this year should be any different. “I would not be surprised if we added on a bit more from now until the year-end.”

Weekly Investment Outlook: December 2 – Climate investment: the news from COP29

COP29, this year’s iteration of the UN’s annual climate-action conference, took place in Baku, Azerbaijan, and much of the conversation was about the cost of addressing the crisis. “Let’s be blunt. The simple answer is: A lot,” says the Private Bank’s ESG CIO, Markus Müller, noting that some estimates suggest the world needs to spend 200 trillion US dollars between now and 2050.

But there were also points of optimism. "Climate finance has been very resilient in recent years," Markus says, "and in some areas we are making real progress." He also explained why it has been so important to bring developing and emerging economies into the conversation. "They are at the front line of climate change, and they are suffering the effects."

Weekly Investment Outlook: November 25 – Beyond turkey and pumpkin pie: all eyes on the US consumer

Just ahead of Thanksgiving and with the opening of the Christmas markets in some European countries, we're taking a closer look at consumption. "So far, US consumption has been really robust," says Dirk Steffen, our Chief Investment Officer EMEA and Global Chief Investment Strategist, "which is probably also due to the fact that the US labour market is still holding up."

Dirk expects relatively strong consumer activity ending the year. Aside from Black Friday, Cyber Monday and holiday shopping, activity will be further accelerated by an uptick in travel, including in other countries around the globe.

He comments on the third-quarter earnings season, saying that not only have the mega-caps and growth stocks in the US delivered good results so far but that Europe has also done relatively well in terms of earnings growth. He also discusses the activities of central banks and what possible interest rate cuts could mean for the bond markets and foreign exchange.

Weekly Investment Outlook: November 18 – The fiscal picture comes into focus

Markets have been on the rise since the U.S. election, a mood that the Private Bank’s Global Chief Investment Officer, Christian Nolting, described as “euphoria” – though he said it may start to temper. “The discussion about austerity is probably gone for the time being”, and that could be inflationary and send longer-term yields higher, Christian says. “We do not expect yields to go massively lower from here.”

Meanwhile, third-quarter earnings season is mostly complete, though there are still some major names left to report. “If companies continue to deliver on the earnings, that could justify higher index levels”, Christian says. In the week ahead, he says he’ll be keeping an eye on whether U.S. services PMIs remain in growth mode.

Weekly Investment Outlook: November 11 – Post-election market jump: What’s next?

Donald Trump secured his victory in the U.S. presidential race, and stocks subsequently jumped. That is in part because of the speed at which the result became clear, says Deepak Puri, the Private Bank’s Chief Investment Officer for the Americas. “The elections were a risk event. Elections bring uncertainty, but the memory of 2020 was quite vivid in investors’ psyche”, Deepak says. “The fact that we have a result very quickly has created this relief rally.”

The Federal Reserve also delivered an interest-rate cut, and noted that inflation is now closer to its target level. “The Fed will go where the data leads us” at its next meetings, Deepak says. But markets are likely to remain attuned to the political landscape, as the Biden administration manages its last months and the new Trump administration comes into sharper focus. “The repercussions of the elections are going to be with us for some time to come.”

Weekly Investment Outlook: November 4 – Election Day, a Fed decision, and earnings roll in

The U.S. election this week sits on a knife’s edge, and it “might have significant importance for sector allocations going forward for the next few years”, says Dr. Dirk Steffen, the Private Bank's EMEA CIO. “The market will price in quite a few things once we get the results.”

But politics aren’t the only matter on the agenda. The Federal Reserve will also make another decision on interest rates, and third-quarter earnings season remains in full gear. We are “coming out on the busiest week for earnings in the U.S., and the results have been quite convincing”, Dirk says. “I think the soft landing is clearly the base case.”

Weekly Investment Outlook: October 28 – Widening: spreads, fiscal deficits and BRICS

In this week’s CIO Weekly Investment Outlook podcast, the Private Bank’s Chief Investment Officer in APAC, Stefanie Holtze-Jen discusses widening spreads in U.S. rates, China’s stimulus impact and the growing list of emerging markets joining the BRICS alliance.

Stefanie says U.S. long term rates are expected to stay higher because of market expectations that deficit spending will continue regardless of the outcome of the election and a Fed that continues with monetary easing as long as inflation allows, reflating the economy. She points to the raft of data coming this week, including the important unemployment data, PCE inflation and third quarter GDP data for a reading on growth.

For Asia, Stefanie notes Japan’s general elections and the Bank of Japan’s inflation target.  With the market eyeing China PMI and industrial data due this week, Stefanie also discusses how market participants have responded to China’s stimulus package announced on August 24.

Finally, Stefanie touches upon the latest BRICS meeting. Reportedly 13 new emerging markets, including Southeast Asia countries, are joining the BRICS trade alliance, as the major economies seek to secure commodities for the energy transition.

Tune in and listen to Stefanie’s key thoughts for the week ahead.

Weekly Investment Outlook: October 21 – Another cut from the ECB, and quarterly earnings in the U.S. and Europe

The European Central Bank has delivered interest-rate cuts at its recent consecutive meetings, but the Private Bank’s Chief Global Investment Officer, Christian Nolting, says that does not necessarily mean the bank will ultimately bring down rates massively from their current levels in this cycle. “They need to also watch inflation, which we still think is sticky”, Christian says.

For now, the main topic in markets is the ongoing U.S. earnings season, Christian says. “Favorite sectors, I think no surprise, are technology and communication services, followed by health care. And energy would be expected to be the weakest sector.”

Weekly Investment Outlook: October 14 – Third-quarter earnings, bond moves, and an ECB decision

Third-quarter earnings season has kicked off in the U.S., and strong economic data from the period could mean that analysts are currently underestimating how strong the results might be, says Dr. Dirk Steffen, the Private Bank's EMEA CIO.

“The consensus is maybe a touch too conservative when it comes to estimating earnings growth”, Dirk says, though he also notes that with the U.S. election coming up and plenty of geopolitical unrest, earnings won’t be the only thing on investors’ minds.

In the week ahead, the big event in Europe will likely be the next policy decision from the European Central Bank, Dirk says. That’s because even though the local economy is not as strong as across the Atlantic right now, inflation remains elevated, making the ECB’s job a bit tricky.