Dear Readers,

Following its rapid rise in recent months, Germany's most important economic indicator has entered the reverse gear. Although the ifo business climate remained at a high level in November, expectations in industry declined slightly. Obviously, the discussions about Donald Trump's future trade policy have already slightly dampened export expectations.

Overall, however, the ifo indicator is still comfortably in the boom segment of the ifo business clock. The ifo traffic light also remains on "green" (attached graphs).

The assessment of the private-wealth exchange model therefore remains unchanged. The economic component remains positive. However, since German stocks are still highly valued, the model proposes, as in the previous month, an equity quota of 60 per cent of the individually identified share component.

One restriction remains: The long-term nature of the model means that policy problems can only be addressed if they are reflected in economic data. For example, only a further decline in the ifo indicator at the end of December and the end of January would trigger a reduction in the equity exposure to 30 percent.

However, the referendum on a constitutional amendment in Italy on 4 December could very quickly have a massive impact on the capital markets. If Prime Minister Matteo Renzi loses office and then resigns, there is a threat of new elections, the success of the "five-star movement" and the return of the euro crisis in an intensified form. Cautious investors should therefore consider hedging their equity exposures in the short term.

yours

Klaus Meitinger

Note: Despite careful selection of sources, no liability can be accepted for the accuracy of the content. The information provided in private wealth is for information purposes only and does not constitute an invitation to buy or sell securities.