To The Moon

Investors in China, Europe, Japan, and the UK began 2025 with the same mindset they had at the end of 2024. Meanwhile, those in Global Emerging, Global Developed, and Global Developed ex-US markets, as well as in Australia and the US, experienced a slight shift in sentiment. Overall, most investors entered the new year feeling neutral, positive, or bullish, except for US investors who turned negative after the latest FOMC meeting denied their expectations for 4-5 interest rate cuts this year. The biggest source of risk in 2024 was political change, with 54% of the world’s population, representing 60% of global GDP, voting overwhelmingly for change. In 2025, the main risks will be policy implementation by newly elected populist leaders and geopolitical tensions. Voters demanded change, and

This edition of the ROOF highlights will take a lookback at sentiment in 2024 and a peak into 2025. Potential triggers for sentiment-driven market moves in 2024 and 2025[1] The major source of risk and swings in sentiment in 2024 was political change: More people voted in elections in 2024 than ever before with voters representing about 54% of the global population and 60% of global GDP going to the polls across more than 70 countries. The major source of risk in 2025 will be  policy implementation by newly elected populist leaders in a multipolar world: Many markets worldwide will experience significant changes in policies and regulations. In some instances, these changes will be quite dramatic. A new and potentially more disruptive trade war could arise between the world’s two large

Last week, sentiment improved in the US and, by extension, in Global Developed Markets, as well as in China and, consequently, in Global Emerging Markets. Conversely, sentiment declined in the UK and Australia. Investors remained bullish in Japan, neutral in Europe, slightly more positive in Global Developed ex-US markets, and bearish in Asia ex-Japan. China: The macroeconomic outlook continues to deteriorate, with deflation risks rising further in November. New loans extended by China’s banks fell significantly short of expectations, amounting to less than half of last year’s levels, indicating persistently weak credit demand. Last week, following the third consecutive meeting since September that promised strong economic stimulus measures, the annual Central Economic Work Conference (CEW

Last week, sentiment in the US and Europe improved from negative to neutral, lifting the mood of Global Developed Markets investors. However, sentiment in Global Emerging Markets and Asia ex-Japan remained bearish as investors awaited further clarification on the new US administration’s trade policies. Japanese investors stayed bullish, though less so than in previous weeks, and have struggled to convert this risk-tolerant sentiment into market gains for the past two months. In China, sentiment remained neutral ahead of this week’s annual Central Economic Work Conference (CEWC). UK investors also remained neutral, with sentiment dampened by uncertainty over the current PM’s low popularity and a lack of details on Trump’s plans for tariffs on UK exports. The certainty brought by the US elec

Insights from last week's changes in investor sentiment: Last week, investor sentiment turned bearish in Asia ex-Japan and Global Emerging markets. Meanwhile, sentiment stayed negative in Europe and Global Developed markets as investors reassessed the impact of potential tariffs from the Trump administration on those economies. Positive macroeconomic data in Australia (inflation) and China (growth) kept sentiment positive in these markets, while investors in the US, UK, and Global Developed ex-US markets remained neutral. The risks to sentiment in the near-term include US monetary policy (FOMC meeting on December 18), further tariff threats to global trade from the Trump administration (any Tweets now), and the (very) high degree of concentration risk (Magnificent-7) and overvaluation (S&a

Investor sentiment declined across all markets we monitor, except Japan. In Japan, investors grew more bullish following better-than-expected inflation data, which reduced the likelihood of the BoJ raising interest rates soon. Sentiment ended the week negative among investors in Asia ex-Japan, Global Developed, Global Emerging markets, and Europe. Meanwhile, sentiment weakened to a neutral stance in China, Global Developed ex-US markets, the UK, and the US. China: Having observed the property market’s decline over the past three years, Chinese authorities have now introduced a substantial support package to stabilize the real estate sector. However, the design of these measures indicates that China’s leadership still believes an economy growing at 5% does not require additional stimulus. T

Investor sentiment declined last week across all markets we monitor as investors globally reassess the implications of a second Trump presidency for everything from the strength of the USD, monetary policy, global trade, and their own markets. Only investors in Australia and Japan managed to maintain their recent optimism, though without further gains. The weakening Yen against the US dollar and the perception that Japan will benefit from the US’s trade policy of decoupling supply chains from China under the Trump administration continue to boost sentiment among Japanese investors. Sentiment in other markets ended the week in neutral, with only investors in the UK and Global Developed ex-US maintaining a positive outlook. In contrast, sentiment in China resumed its downward trend, weighed

The recent rise in sentiment that began in early September (excluding China) paused last week as investors tensely awaited the outcomes of the US Presidential election and the meeting of China’s Standing Committee. The previous week’s bullish mood among investors in Asia ex-Japan, Australia, Global Developed markets, Global Emerging markets, and the UK turned neutral ahead of these events, recognizing the binary nature of these potential outcomes. The US Election: Last week, the markets were weighed by anxiety about the US election, largely due to predictions of a very tight race by pollsters – the same ones who forecasted “Remain” and “Clinton” back in 2016. The combination of a deeply divided electorate, sharply contrasting visions from the candidates on America’s future, and the expecta

Blick von unten auf die Hochhäuser von Skyline in USA November holds two major events that could make waves on the stock markets: the US election and the US Federal Reserve decision. The uncertainties are likely to lead to significant fluctuations, it is said. 4 November, 2024 FRANKFURT (Frankfurt Stock Exchange). This week, all eyes are on the US with the election on Tuesday and the Federal Reserve meeting on Thursday. “It is still a neck-and-neck race in the presidential election and also with regard to the majorities in the Senate and the House of Representatives,” notes Ulrich Kater from DekaBank. In such tight circumstances, it could well be that a few days will pass before the election results are clear. “This uncertainty could lead to increased fluctuations on the capital markets.”

Investor sentiment saw a boost last week, with six out of the ten markets we track (Asia ex-Japan, Australia, Global Developed, Global Developed ex-US, Global Emerging, and the UK) closing the week on a bullish note. Japan’s sentiment was also positively influenced by a weakening Yen, nearly reaching bullish levels. In Europe, investors briefly turned bullish but ended the week with a neutral outlook. Meanwhile, sentiment in the US and China remained cautious due to upcoming significant events in these markets: the US elections and China’s Standing Committee meeting. Why are global investors so convinced (bullish) of a good outcome when local investors (US and China) are themselves unsure? The US Election: Investors globally have been increasingly positioning their portfolios for a Trump v