Current Situation Assessment - 2nd quarter 2022

Our short-term assessment of developments on the financial markets.

Development on the financial markets

Stubbornly high consumer prices led to a steady rise in interest rates during the first quarter. The war in Ukraine has kept inflationary pressures high via rising commodity prices, reinforcing the trend of rising interest rates. As a result, safe investments such as US government bonds recorded the biggest drop in value in forty years in the first quarter.

Equities were already under pressure at the beginning of the year and the outbreak of war has intensified this again. As we expected, the setbacks on the stock markets were short-lived and a clear recovery from the lows has since occurred. However, the bottom line for equities in the first quarter remains a clearly negative contribution.

Outlook

We expect the next economic low in March 2023, by which time we see a further decline in economic momentum, even recessionary tendencies from the beginning of 2023. The expectation of rising interest rates is currently exaggerated and must be adjusted downwards due to the coming economic slowdown. This is positive for bonds and equities and ensures a recovery in the second quarter. The uncertain environment will persist for the rest of the year and includes a correction potential of 10% for equities in the coming quarters.

Disclaimer - legal notice

This publication was produced by the Investment Office of the Colin&Cie Group. The information and opinions contained in this document are based on sources we believe to be reliable. However, we cannot guarantee the reliability, completeness or correctness of these sources. All information and quoted rates are only up-to-date at the time of this publication and are subject to change at any time without notice. The content is based on numerous assumptions made by the Colin & Cie Group. It should be noted that different assumptions can lead to materially different results. The forecasts and assessments are only current at the time this publication is prepared and can change at any time without prior notice. Past performance of an investment is not a guarantee of future results. Certain investments can experience sudden and substantial losses in value. This information and views do not constitute a solicitation, offer or recommendation to buy or sell investment instruments or to carry out any other transactions. We recommend interested investors to consult their personal advisor before making decisions on the basis of this document so that personal investment goals, financial situation, individual needs and risk profile as well as further information can be duly taken into account as part of a comprehensive consultation. The information contained in this publication is marketing material that is distributed for advertising purposes only.