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Global stock markets on the rise: AI technology leads to new all-time highs

The rally on the stock markets continued and is gaining in breadth. It is not only the US market that is chasing one record after another, but also Japan, for example. There, the Nikkei 225 index reached a new all-time high after 34 years. The stock markets continue to be driven by the hype surrounding artificial intelligence. Accordingly, market participants did not focus on macro figures, but the quarterly results from Nvidia. In fact, the chip manufacturer actually managed to exceed the high expectations and caused a brilliant share price rally. In the course of the AI focus, the higher than expected inflation in the US inflation data, which was higher than expected, faded into the background. The inflation rate now stands at 3.1% and the core rate at 3.9%. The steady disinflation trend towards two percent seems to have been interrupted for the time being and the markets are postponing the hoped-for first rate cut further and further back.

In Germany, meanwhile, the economic situation is stabilizing at a low level. The ZEW index was better than expected. The Ifo business climate index also showed a slight increase, which was in line with expectations. However, the current level of 85.5 points has historically only been recorded during periods of recession. Movements on the interest rate markets remained manageable in the reporting period. The prospect of interest rate cuts in the near future is at conflict with the good economic situation and the easing disinflation trend, at least in the USA.

In the USA, this led to slightly rising interest rates at the long end (the 10-year US government bond was quoted at 4.25%), while in the eurozone the bleak economic situation led to slightly falling interest rates. Both investment-grade corporate bonds and high-yield bonds performed well in the risk-on environment, with only the high-yield segment outperforming government bonds. Despite the shorter duration, the bond side of the Moventum portfolios was well positioned in this environment and was able to generate stable returns. On the equity side, the Moventum portfolios benefited from the new highs in Japan, as this equity market is overweighted. This was counteracted by the underweighting of Europe, which outperformed. The US equity market was the laggard. Here, rising interest rates in the course of higher-than-expected inflation data had a negative impact over the entire reporting period and resulted in only slight price gains overall. The underweighted emerging markets also made significant gains. The trend was led by China, where the government is trying to stimulate the economy with new measures. In view of the rise in interest rates, value stocks outperformed growth stocks in the USA.

In Europe, on the other hand, style development was balanced. At sector level, the growth sectors of technology and communication services therefore also underperformed. The healthcare, energy and financials sectors outperformed. At the level of the Moventum portfolios, winners and losers roughly balanced each other out. The favorable market environment led to price gains in all Moventum portfolios in the past two weeks. However, the growth orientation on the equity side had a somewhat negative impact and on the bond side the strategies were affected by the rise in interest rates in the USA due to their global orientation. This was partially offset by above-average results from individual managers. The PWM portfolio performed well in the past two weeks, with the long-only equity funds and the majority of bond funds making a particularly strong contribution. Only the FvS suffered from the rise in interest rates in the USA. All equity strategies generated good gains, with the GQG Partners funds benefiting in particular from their exposure to Nvidia. The price of gold trended sideways during the reporting period.

Performance overview.


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