Latest news with #ChristianMueller-Glissmann
Yahoo
23-07-2025
- Business
- Yahoo
‘Goldilocks' is ignoring the three bears, Wall Street analysts say
Markets are mostly maintaining their all-time highs despite Trump's tariffs, threats to Fed independence, and analysts reducing their expectations for U.S. GDP growth. Investors are instead enjoying a 'Goldilocks scenario,' Goldman Sachs says. Barclays agrees: 'Another week, another tariff salvo, and another market shrug.' S&P 500 futures are barely moving this morning after the index itself hit an all-time high yesterday, poking its head above 6,300 for the first time ever and closing at 6,305.6. In Asia and Europe, there was a small amount of profit-taking earlier today but nothing to be concerned about—equities remain mostly near their record peaks globally. There is no excuse for this behavior, arguably. There are three bearish indicators that ought to be scaring investors right now: The U.S. is imposing a trade tax on the entire planet; President Trump has threatened the independence of the Federal Reserve; and Goldman Sachs just moved down its forecast for U.S. GDP in the second half of the year (to 1.1%). But, as Goldman's Christian Mueller-Glissmann told clients in a recent note seen by Fortune, the markets appear to be ignoring this and enjoying a 'Goldilocks scenario' instead. 'Another week, another tariff salvo, and another market shrug,' Barclays analyst Christian Keller et al. told their clients. 'Resilient US consumer data and robust Q2 earnings for now dominate over initial signs of tariff effects on CPI, continuing threats of tariff escalations and increasing political pressures on the Fed.' There are reasons to worry that stocks might be overpriced. Deutsche Bank's Henry Allen pointed out recently that the Fed Funds futures speculators are betting in a way that suggests they expect an upcoming recession. 'If we look at Fed funds futures as of last night's close, we can see that just over 100bps of cuts are priced in over the next year to August 2026. That comes on top of 100bps already delivered between Sep-Dec 2024. So, if realised, that would be just over 200bps of cuts in two years. But historically, getting 200bps of cuts in two years has almost always required a recession,' he wrote in a research note. Maybe. It's worth remembering that the Fed Funds futures market changes daily, sometimes moving quite dramatically. These investors may not literally be pricing in a recession. But they are certainly betting that Fed Chair Jerome Powell will deliver cuts to interest rates sooner or later. More cheap money is good for stocks, and that's what stocks seem to be reflecting right now. Here's a snapshot of the action prior to the opening bell in New York: S&P 500 futures were off 0.13% this morning after the index hit a new high, at 6,305.60, up 0.14% yesterday. The S&P has never been above 6,300 before. The UK's FTSE 100 was clinging on above 9,000, at 9,008.61 in early trading. STOXX Europe 600 was down 0.44% in early trading. Japan's Nikkei 225 was down 0.11%. China's CSI 300 Index was up 0.8%. Bitcoin is still above $118K. This story was originally featured on
Yahoo
20-06-2025
- Business
- Yahoo
The Dollar Is Hanging On to Its Haven Role by a Thread, Survey Shows
(Bloomberg) -- The escalating Middle East conflict is likely to help the dollar hold on to its haven role — but only just, the latest Bloomberg Pulse survey shows. Security Concerns Hit Some of the World's 'Most Livable Cities' One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown A little more than half of 251 respondents think the US currency will regain its status as a safe asset as Iran and Israel continue to carry out attacks on each other. Yet participants also see the Bloomberg Dollar Spot Index falling over the next month, according to the poll conducted June 13-18. 'While we expect further dollar weakness, investors now perceive more two-way risks,' Goldman Sachs Group Inc. strategists including Christian Mueller-Glissmann and Michael Cahill wrote in a note to clients. 'Some argue the depreciation may be overdone, especially given resilient US asset returns.' The divergence underscores a shift in perceptions of the greenback, as global investors grow more averse to President Donald Trump's policies. While geopolitical tensions in the past week have limited its decline, sentiment toward the US currency remains overwhelmingly bearish. The share of respondents expecting Bloomberg's dollar gauge to fall over the next month is the smallest since February, according to Pulse survey data. The index was set for its first weekly gain since May. Beyond the revival of haven demand, the greenback also received support from a Federal Reserve policy decision on Wednesday, where Chair Jerome Powell warned of the inflationary impact of tariffs and said policymakers don't have great conviction in their outlook for lower rates. All the same, this week's advance barely dents the greenback's battering this year. It has lost more than 11% against the euro and about 8% against the Japanese yen so far this year. A weaker dollar is here to stay, according to Invesco Ltd. Senior Portfolio Manager Kristina Campmany. Recent shakeups in US policy mean that there's now a premium for holding the currency, Campmany said earlier this month at Bloomberg's Money & Macro: An Evening with Markets Live event in New York. As for Treasuries, higher oil prices resulting from the Middle East conflict will add to price pressures that will temper the bond rally — that's according to 49% of survey respondents. About a third said the crude spike will have no effect on US debt. The appeal of Treasuries in times of turmoil was clear. When asked which asset will deliver better volatility-adjusted returns over the next month, 54% of respondents favored bonds over US stocks. Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-03-2025
- Business
- Yahoo
Beyond defence: Stocks set to gain from Germany's economic revolution
Germany's historic shift on fiscal expansion is set to reshape Europe's economic landscape, unlocking a wave of public spending that could boost growth across the eurozone. With hundreds of billions of euros expected to flow into defence, infrastructure, and energy, investors are eyeing key stocks poised to benefit. Goldman Sachs analysts have identified 12 buy-rated European companies outside the defence sector that could ride this spending boom, spanning industries from airport operations to renewable energy. Germany's government-in-waiting is setting the stage for a historic departure from its traditionally conservative fiscal approach. The CDU/CSU and SPD-led coalition unveiled a €500 billion off-budget infrastructure fund—equivalent to 11.6% of GDP in 2024—to be deployed over the next ten years. This fund aims to revamp the country's ageing infrastructure, accelerate the energy transition, and boost housing and transport investments. In a further break from its traditionally strict fiscal orthodoxy, the government will exempt defence spending exceeding 1% of GDP from the constitutional debt brake—a rule that limits new borrowing—effectively unlocking an additional €11 billion per year for military upgrades. Additionally, Germany will ease fiscal constraints on its regional states, raising the structural deficit allowance from 0.0% to 0.35% of GDP. Goldman Sachs economists have raised their German GDP growth forecasts for this year and 2026, citing stronger fiscal stimulus. This revision also prompted an upgrade to eurozone growth projections, with the European Central Bank's (ECB) terminal interest rate forecast now set at 2%. By contrast, US growth forecasts have been downgraded, weighed down by rising tariffs and weaker-than-expected expansion under President Donald Trump. 'There has been a material repricing of reflation risk in Europe versus the US across assets,' said Christian Mueller-Glissmann, CFA, at Goldman Sachs. Amid this evolving economic landscape, Goldman Sachs has identified 12 Buy-rated European stocks—outside the defence sector—that stand to benefit from the anticipated spending boom. These companies span industries ranging from construction and logistics to energy and real estate, making them key players in Germany's economic revolution. Eiffage – The French construction giant is well-positioned to gain from increased defence-related projects in both France and Germany. The company has already secured a €7 billion building renovation contract for the French Armed Forces, with further potential for its defence-focused Clemessy subsidiary. Sika – The Swiss building materials firm could benefit from the push for sustainable construction, as its mortars and additives help reduce the carbon footprint of high-emission industries like concrete production. Fraport – Frankfurt's airport operator could see gains from potential corporate tax cuts and reduced aviation taxes. Its newly expanded Terminal 3, set for completion in 2025, will also support growth. 'Fraport raised its airline fees at a pace higher than expected,' said Patrick Creuset, an analyst at Goldman Sachs. DHL – The logistics giant is poised for upside if Germany's fiscal expansion fuels a broader economic acceleration across Europe, driving increased shipping demand. – As Europe modernises its aging power grid, Germany's fiscal policies could unlock long-term growth for energy players. derives two-thirds of its EBITDA from power grids, with Goldman Sachs analysts seeing an 'underappreciated opportunity' from electrification trends. RWE – A re-industrialisation effort in Germany could drive power demand growth by one percentage point per year, boosting investment across the electricity value chain. Analysts expect this to translate into higher returns in renewables, flexible generation, and power grids. Siemens Energy – The German government's potential plan to develop 20 gigawatts of gas power plants by 2030 could fuel growth for Siemens Energy, whose gas service business contributed 31% of group revenue in 2024. 'Comments on new gas plants are supportive for Siemens Energy,' said Ajay Patel, a Goldman Sachs analyst. Nordex – The wind turbine manufacturer has increased its European exposure, with the region now accounting for over 80% of its order backlog. Government support for renewable energy is expected to enhance its market position. BASF – The German chemicals giant is approaching a financial turning point, with Goldman Sachs analysts anticipating a sharp free cash flow improvement in 2026 as it monetises a €10 billion investment in China. Analysts also highlight the company's commitment to returning at least €12 billion to shareholders through dividends and buybacks between 2025 and 2028. Additionally, any potential reinstatement of Russian gas imports into Europe would favour BASF, given its energy-intensive operations. Akzo Nobel – The Dutch coatings company is expected to see a 'meaningful volume improvement' from 2026 onwards. 'Akzo's shares are trading at a significant discount to historical averages,' said Goldman Sachs's Georgina Fraser, PhD, adding that European fiscal expansion and post-war reconstruction in Ukraine could provide further tailwinds. Geberit – Switzerland-based Geberit, a leader in sanitary appliances, could benefit from Germany's push for new housing. With nearly 30% of its sales coming from Germany, it stands to gain from any government efforts to alleviate the housing shortage. Vonovia – Germany's largest residential property group could benefit from public investment in housing and infrastructure. Government incentives to modernise properties could help Vonovia expand its non-rental revenue streams, which it aims to grow to 25% of EBITDA by 2028. 'The new policies could incentivise private homeowners to modernise their properties by leveraging subsidies and tax incentives,' said Jonathan Kownator, a Goldman Sachs analyst. By 2028, the company aims to increase EBITDA from non-rental revenues—such as development—to as much as 25%. A reminder, the information in this article does not constitute financial advice, always do your own research on top to ensure it's right for your specific circumstances. Also remember, we are a journalistic website and aim to provide the best guides, tips and advice from experts. 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