“Low interest rates are a big opportunity for investment. But the issue is that this money should go to the real economy, not the financial economy.” – Carlos Slim
Pfäffikon SZ, Switzerland – Last week was a hard week for investors. Nevertheless, the investment climate is still reasonably good at the moment. Inflation and interest rates are still low; inflation is not even a problem. The job market also looks quite good, and the wages are finally picking up. For next year, Wall Street expects profit growth of around 10% for the S&P 500.
Why do investors react so paradoxically? The interest factor is currently the game breaker. The core issue is that the bond market does not believe the Fed’s prospects. This skepticism has grown in recent months and got the upper hand the last week. The arrest of financial director Meng Wanzhou from the tech company Huawei was the last drop.
The agenda is fairly empty the coming week, but this makes the week no less interesting. In particular, technically minded gurus will try to scare many equity investors.
This material is communicated on December 9, 2018 by 1324 | by Thirteen Asset Management AG, Rietbrunnen 20, 8808 Pfäffikon SZ, Switzerland. This material is for information purposes only and is not intended to be a solicitation or invitation to invest. Any organizations or products described in this material are mentioned for reference purposes only. This material is intended only for investment professionals and professional clients and must not be relied upon by any other person. It is proprietary information of 1324 | by Thirteen Asset Management AG and may not be reproduced or otherwise disseminated in whole or in part without prior consent from 1324 | by Thirteen Asset Management AG. Alternative investments can involve significant risks and the value of an investment may go down as well as up. There is no guarantee of trading performance and past or projected performance is not a reliable indicator of future performance. We recommend to consult your bank, investment and/of tax adviser.