Dear Readers, "The probability distribution of future stock market developments has just fundamentally changed. We are still a long way from the positive figures that prevailed until autumn 2018. But the sharp decline in the probability of negative turbulence suggests an increase in the equity quota," analyses Oliver Schlick, who recalculates the capital market seismograph every four days. As you know, the capital market seismograph distinguishes between three phases: "green" (quiet market = buy), "yellow" (turbulent market with positive expectation = invest, but with hedge) and "red" (turbulent market with negative expectation = do not invest).

Dear Readers, The ifo business climate continued to decline significantly in January. In the German executive floors, the Munich conuncture researchers write, the restlessness is growing. In fact, all components of the ifo business climate declined. The collapse of expectations for the coming six months was particularly drastic in the retail and manufacturing sectors. As you know, we are monitoring the data from the export-oriented industry very closely because they allow conclusions to be drawn about the strength of the global economy. The current results - the industry is now as pessimistic as it was during the euro crisis in 2012 - give an idea of increased economic risks.

Dear Readers, "the monthly comparison of the probabilities of the capital market seismograph reflects a crisis situation on the stock markets," informs Oliver Schlick, who recalculates the capital market seismograph every four days. As you know, the capital market seismograph distinguishes between three phases: "green" (quiet market = buy), "yellow" (turbulent market with positive expectation = invest, but with hedge) and "red" (turbulent market with negative expectation = do not invest). Last month, the likelihood of a bear market (red) had risen continuously from 47 percent to 81 percent. The probability of a calm, positive stock market ("green, buy or hold") is only 10 percent. The probability of a turbulent, volatile market with a...

Dear Readers, it's been a turbulent year. What began in an exuberant mood - economic and profit expectations were massively revised upwards at the beginning of 2018 - now ends in minor. Economists are cutting their growth forecasts, stock prices are falling. Investors look to the New Year with concern. One of the best leading indicators signaled this trend reversal in good time. In February 2018, the expectation index for the ifo business climate in German industry fell for the third time in succession. The entrepreneurs surveyed by the ifo Institute became more sceptical - and rightly so, as we now know. In conjunction with the very high share prices, this generated a sell signal for the private-wealth stock market indicator ("We are out...

Dear Readers, The ifo business climate in November did not reverse the trend. The most important component for us - the industry's expectations for the future - has continued to decline. The ifo traffic light is now also "red" again. Red traffic light values make a contraction of the economy more likely than an expansion.