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Market Updates

Edgar Walk, Chief Economist at Metzler Asset Management, comments regularly on various topics surrounding capital markets, the economy and monetary policy. Read about Walk’s assessments in quarterly and annual capital markets outlooks. Under market:update Special Topics, you can read about background topics, markets, regions and forecasts. In addition, asia:insight offers insight into the economy in Asia. 

 

market:update Special Topics

Illustration Sky Euro | Metzler
The importance of dividends in a sluggish economic environment

Dividend yield on European shares currently corresponds precisely to the long-term average since 1970. This means there is no evidence that European equities are overvalued due to the liquidity programs of the central banks – unlike bond yields, which are currently at historic lows. Against this background, investors’ interest in dividend stocks is likely to rise markedly. Furthermore, the performance contribution of dividend yield is likely to be a decisive factor for total return in the coming years due to slowing economic growth. Our indicator currently signals that the global economy could be at the beginning of a downturn, which, in the past, has been known to lead to outperformance of equities with high dividend yield.

Read more on this topic in the newest special edition of market:update.

market:update Quarterly Outlook

Illustration Bulle und Bär | Metzler
Capital Markets Outlook on the 2nd quarter 2019

Bond markets and equity markets performed well in the first quarter. The about-face in monetary policy by the US Federal Reserve and the European Central Bank boosted global equity prices in particular. Although the economic downturn accelerated in the first quarter, Edgar Walk, Chief Economist at Metzler Asset Management, considers it unlikely that the euro zone will slip into recession. Leading indicators point to an economic upswing starting at mid-year. The US economy is growing at a good pace and China could see an economic turnaround. Sources of great uncertainty still include the unclear Brexit outcome, the latent debt crisis in Italy, and the trade conflict between the USA and China.

Read more about Walk’s assessments and forecasts in his Capital Markets Outlook on the second quarter.

asia:insight

Illustration China | Metzler
Sand in the gearbox will not stop the New Silk Road

March 13, 2019 – asia:insight

Since the New Silk Road project started, expansion of infrastructure has stalled in some Asian countries, but overall, expansion of this major project is progressing well in other regions. However, the days when Beijing was able to dictate project conditions seem to be over. Now it is a matter of slowly expanding the Silk Road network in a pragmatic partnership without letting any countries fall into a debt trap. If China succeeds at gaining the trust of the partners by allowing more codetermination for all parties involved, the project could become a unique success story. One thing seems clear: there is a considerable need for investment in infrastructure, not only in Asia’s bordering countries but also in Africa and the Middle East.

Read more on this topic in the latest edition of asia:insight, which also includes a side note on current developments in China’s equity markets.

market:update Annual Outlook

Illustration Sky Euro | Metzler
Most likely a good year on the financial markets

Edgar Walk, Chief Economist Metzler Asset Management, is optimistic about 2019. According to his assessments, leading indicators show that the upswing in the USA is still intact. Therefore, an important prerequisite for the global economy to remain on the growth path is fulfilled. In this climate, Walk believes there will be good investment opportunities in emerging economies in 2019, but also on Europe’s equity markets. Investments in Chinese A-shares appear attractive to him in the medium term. Furthermore, Walk considers catastrophic developments to be extremely unlikely for the global economy and financial markets in 2019.

Read more about Walk’s predictions in his market:update Annual Outlook for 2019.

Edgar Walk, Chefsvolkswirt Metzler Asset Management
Edgar Walk

joined Metzler in 2000. As Chief Economist in the Asset Management division, he is responsible for formulating our global economic outlook. Due to his close cooperation with the portfolio management, he focuses on capital market themes as well as on global economic analyses. Mr. Walk holds a master’s degree in economics from the University of Tübingen in Germany and spent a semester at the University of Doshisha in Kyoto, Japan. In addition, he completed the program “Advanced Studies in International Economic Policy Research“ at the Institute of World Economy in Kiel, Germany.