High global inflation, monetary climate change (led by the US Federal Reserve) – are the easy times for the stock markets now over? In any case, for the past few weeks we have seen a rotation from growth stocks to value stocks. This is rather bad news for American indices, which are dominated by big US tech stocks.
Inflation: US, Europe, China – whose stock markets are doing better?
But while most central banks (especially the Fed) are changing their monetary policy, the ECB in Europe is still living in cloud cuckoo land: it still considers inflation to be “temporary” and does not want to raise interest rates in 2022. So is now the time for the Dax and the European stock markets, which are benefiting on the one hand from the ECB’s more relaxed monetary policy and on the other hand from the shift to value – while American stocks, for example, have a harder time ahead of them due to the Fed and the rotation out of tech? And China? There, the leadership in Beijing has crashed its tech stocks – and is currently trying to let air out of its real estate bubble in a controlled manner (China’s real estate market is the largest asset class in the world). At the same time, Beijing’s zero-Covid policy is causing problems with Chinese consumption – but China’s central bank has already turned things around and tends to want to stimulate more because inflation is not the big problem in the Middle Kingdom. But now the Winter Olympics are coming up in the Middle Kingdom – if this causes the corona numbers to go up, this could lead to further lockdowns. The consequence for the West: even more severe delivery bottlenecks, even more material shortages, and thus even more inflation.
Wealth managers: healthy valuations matter now
Let’s take a look at the valuations of the various stock markets: the Dax has a price-earnings ratio (P/E) of 15, but the US benchmark index S&P 500 is 26.5, and the Nasdaq is 27.3. The Shanghai stock exchange, on the other hand, is valued at a P/E ratio of 17.5. Therefore, Stefan Breintner from DJE Capital sees the Dax in a good position for 2022. In his view, the liquidity rally is over, but the “manslaughter argument” TINA (no alternative to shares) still applies. But it now depends on which stocks you buy – the easy times are over for the time being due to the permanently high inflation, Breitner said in an interview with Markus Koch: Read and write comments, click here
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