The column – ARIVA.DE

The rally at the beginning of the year surprised many players. For this reason, the movement has also turned out to be correspondingly clear. In the past year, for example, the stock market was under the particular influence of rising energy prices and, as a result, rapidly rising inflation. In order to combat this, the central banks had abandoned their extremely expansive monetary policy and tightened the interest rate reins more or less significantly. The US Federal Reserve reacted more quickly than the European Central Bank, which means that the pressure is gradually easing. This raises the question of whether investors’ fears, which shaped the picture last year, are still justified.

Soft landing

Investors were particularly concerned about the impact of rising interest rates. These make loans more expensive and therefore slow down economic development. There were fears that the significant interest rate hikes would not only slow down the economy, but also lead to a clear recession. So far, this has not come true, the economic development is proving to be more robust than was widely assumed in the past year. This means that a “soft landing” is now gradually being considered possible, a downturn in the economy that, however, does not drift negatively, which is now gradually being priced into the quotations.

Better than expected?

The energy prices, which have been falling for months, are of course also reflected in the development of inflation. In addition, the measures taken by the central banks usually have a time lag of between six months and one year before the effects unfold. The interest rate hikes of recent months should therefore continue to have an effect in the coming months, which should further reduce price increases. In this regard, one can look forward to the meetings of the US Federal Reserve and the European Central Bank, which will take place on Wednesday and Thursday respectively. If the monetary watchdogs signal relaxation, this should also help the stock market.
Last but not least, China’s economic development is also expected to have a positive impact in the coming months. There, the measures to combat the corona pandemic had weighed heavily on the economy. The end of the lockdowns should drive economic output up significantly again in the coming months. From these perspectives, the outlook for the coming year is not as bad as it might seem at the moment!

Good luck in the coming trading week

Stephen Flintstone
Leverage Certificates Trader
http://www.hebelzertifikate-trader.de

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