The US election campaign ended with the victory of Mr. Donald Trump. At this first viewing we assume that the new Administration might be focusing mainly on US domestic advancement i.e. issues that will be decisive in transforming the US economic setting.
We have no doubt that in recent years/quarters/months the economic discourse has undeniably focused on managing interest rates to combat inflation and, in particular to counter inflationary fears and pressures.
We have no doubt that the economic discourse in recent years/quarters/months has undeniably focused on managing interest rates to fight inflation and, in particular, to counter inflationary fears and pressures.
Due to weak economic growth expectations in the US in early August 2024, stock markets worldwide have been experiencing both great nervousness a well as sharp negative correction. So far in 2024 the correction concerns the US tech giants but not only.
The latest actions by central banks are indeed astonishing. On 8 June 2024, the Neue Zürcher Zeitung wrote: “It rarely happens, for once the Europeans are ahead of the Americans”, citing the interest rate cuts by the Swiss National Bank and the European Central Bank. To make the connection clearer, it was the Swiss National Bank that was the first major central bank to announce an imminent turnaround, on 21 March 2024.
With regard to short- and medium-term expectations, most forecasts can be described as rather pessimistic. We believe that they can neither be considered promising nor relatively coherent. In this EMR, we will focus on the average developments of various stock indices in order to derive a likely, realistic outlook.
WHICH STATEMENT IS TRUE?
Inflation is currently assumed to be the most deterministic factor?
Demand management is the most important determining factor?
Suppls management is the most deterministic factor?
Most forecasts can be characterized as rather pessimistic, as far as short- and medium-term expectations are concerned. Therefore, they can be considered somewhat unpromising and relatively incoherent. In this EMR we will focus on the average performance of several equity indices to try to define a likely outlook.
The frequent repetition of comments – in the media – suggests that economic developments should be reasonably consistent from country to country. The charts, in this EMR, raise the question: What can be inferred from the performance of Swiss and US GDP for the respective equity indices and currencies, in the current uncertain and controversial environment? What follows is what we presume to know.
Recent developments show on the financial markets that hope and fears are not and cannot be the only tools explaining their performance. Consequently, in this EMR we focus on the performance of selected equity indices. In addition, the environment continues to be characterized by absurd and unacceptable armed conflicts and other shocks that could shake the world.
