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News from the editorial

  • Klaus Meitinger

Germany is turning the corner.

(Reading time: 3 - 6 minutes)
You will probably be startled by the headline "Germany in recession" in the next few days. This is because there is indeed a high probability that the German economy will have contracted slightly in the first quarter of 2024. The official definition of a recession - two negative quarters of GDP in a row - would then be fulfilled. Don't be confused. That is the past. The economic low point should have been reached in February. This is indicated by the business climate survey conducted by the Munich-based ifo Institute. The mood among companies improved considerably in March. The current situation is now viewed more favourably than in the previous month. Above all, however, company bosses' expectations for the next six months were significantly...

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  • Klaus Meitinger

Industrial economy may have bottomed out - continue to invest in equities.

(Reading time: 3 - 5 minutes)
The stabilisation process of the German economy is almost textbook. According to the ifo Business Climate Index, the situation has deteriorated continuously since mid-2022 and has now reached a level in February 2024 where positive and negative reports from the boardrooms roughly balance each other out. That looks like zero growth. Will it stay that way in 2024? Will the economy improve in future? Or will it continue to deteriorate? The business expectations for the next six months provide an insight into this. Although these are still pessimistic, the degree of scepticism is slowly decreasing. The ifo therefore writes that the economy is stabilising at a low level. In our view, there is even justified hope that this could result in a slight...

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  • Klaus Meitinger

Stabilisation phase in industry.

(Reading time: 2 - 3 minutes)
At the end of 2023, the mood in the German economy had deteriorated again according to the ifo Business Climate Index. At first glance, this negative trend continued in January. The business climate index continued to fall and expectations in the economy as a whole were more pessimistic. The ifo Institute concludes that the German economy is stuck in recession. Nevertheless, there is hope for equity investors. The deterioration in the climate is due to significant setbacks in the service sector, in trade and above all in the construction industry. In industry, on the other hand, both the business situation and the business expectations, which are decisive for the private wealth stock market indicator, have improved again following the decline...

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  • Klaus Meitinger

Recovery in the economy interrupted.

(Reading time: 1 - 2 minutes)
At the end of the year, the mood in German industry deteriorated again slightly according to the ifo business climate. Business expectations became more pessimistic. And on the ifo economic clock, the rise towards recovery has stopped for the time being (chart). Only a month ago, the ifo economic indicator had indicated a turnaround for the better. Does this now need to be revised? It is important for you to know that only three consecutive declines in business expectations would erase the positive economic signal. Short-term fluctuations in this indicator are not unusual when the economy is working its way out of a trough. The positioning of the private wealth stock market indicator will therefore not change for the time being. The...

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  • Klaus Meitinger

Buy signal confirmed.

(Reading time: 3 - 6 minutes)
A month ago - at around 14,800 points in the DAX and 23,800 points in the MDAX - we wrote here: "A good acquaintance once said: the worse an investment feels at the moment you buy it, the better its long-term prospects. Voilà. Here we are. It actually feels very bad to invest more heavily in German equities right now. The "sick man of Europe" is in recession, the DAX has been trending downwards for weeks and the shares of small and medium-sized companies in particular have fallen massively in value. Nevertheless, the private wealth stock market indicator is giving an initial buy signal. The specific equity allocation suggested by the stock market indicator will be increased to 100 per cent of the individually planned equity allocation." You...

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