In the capital markets, things sometimes do not go as they seem logical at first glance. In the past few days, news from the banking sector unsettled investors. Actually, the bank quake represents a new, additional risk factor for the stock markets, which - so the assumption - could also increase the probability of thunderstorms on the capital market seismograph.At the same time, however, yields on US five-year government bonds fell because market participants expect that the interest rate peak in this cycle could now be reached earlier than previously expected in view of the stress in the financial sector. "As US yields have an important influence on the probability distribution on the seismograph, this caused a significant increase...

Situation better, expectations more optimistic - the Ifo Business Climate in March puts a tick behind the recession fears in Germany. The positioning on the ifo business cycle clock continues to move steadily in the direction of recovery (chart above). And the economic traffic light of the Munich-based economic researchers is green (bottom chart). The index for business expectations in industry, which plays a decisive role in the private-wealth stock market indicator, has recovered particularly dramatically recently. It climbed steadily from minus 40.5 points in October 2022 to just minus 5.1 points (chart below). In plain language: the number of those who expect their business to improve over the next six months is now almost as large...

It remains exciting with the indicators that determine the private-wealth stock market indicator. On 25 January, the ifo business climate provided an economic buy signal for German shares. Currently, the capital market seismograph, which has been very cautious for a long time, is beginning to loosen its defensive stance somewhat. As you know, the seismograph combines various economic variables - early economic indicators, interest rate developments or price fluctuations on the stock markets. From these, the probabilities for three market states in the next month are distilled. Green stands for the expectation of a calm, positive market. If green dominates, investors should invest in shares. Yellow indicates the probability of a turbulent...

  The emerging turnaround in the German economy is becoming increasingly clear. The German economy is more resilient than most economists had expected. This underpins the strategic buy signal for German equities from the business cycle component in last month's private-wealth stock market indicator. The latest ifo Business Climate Index for February shows a further improvement in sentiment in the German economy. The positioning on the ifo business cycle clock is now gradually moving in the direction of recovery (Chart above). And the economic traffic light of the Munich-based economists is also green. This recovery is particularly significant for the index of business expectations in industry, which plays an important role in...

After the business cycle component of the private-wealth stock market indicator delivered a buy signal last week, we received many enquiries from the network. How can it be that the outlook in industry is improving while new orders - an important leading indicator - are declining significantly? Indeed, new orders do not look good. Since the beginning of '22 they have been showing a clear downward trend, both from abroad and domestically. Especially in real terms - i.e. in terms of pure volume - there is a clear slump (see chart below). And because volume is a decisive factor for capacity utilisation and thus to a large extent also for profit margins - this is a development that can cause concern for investors. It is interesting that...