Comment: How do I position myself for the second half of the year?

Stock markets could face consolidation in the summer months. Temporary resets may offer opportunities for purchases.

In the first half of the year we experienced stock market turmoil that one can confidently call historical. After an all-time high in mid-February, the DAX® plummeted by 40 percent within four weeks to recover by 50 percent in the following three months. The reason for the crash is known: the extensive lockdown to curb the COVID-19 pandemic.

But what led to the phenomenal rise in prices by mid-June? Corporate profits as the fundamental foundation for stock market prices were revised downwards by around 40 percent in the first half of the year and are currently stabilizing. As a result of the easing measures, the economy is slowly picking up speed again, even if we estimate that it will take at least the end of 2021 until the European economy has reached the level of 2019 again currently just stabilizing the environment? It is true that the increase in stock prices has so far been based almost exclusively on positive expectations from investors. “Exchanges act the future” is an old saying. And there are strong signs of a significant economic recovery based on historically high fiscal and monetary stimulus programs. Against this background, the considerable recovery in stock market prices is understandable. The question is: How should you position yourself for the second half of the year when the stock exchanges have already anticipated a lot of the expected economic recovery?

A second wave of infections and a slower-than-expected economic recovery remain risk factors that favor increased volatility on the stock markets. We view the risk of strong equity market setbacks as limited due to the massive stimulus measures, but expect consolidation on the stock markets over the summer months. This may be stronger for individual titles. In the medium term, however, we continue to see opportunities on the stock market, with Christian Stocker now also on onemarkets TV

Who has the stock market experience of Christian Stocker want to use for themselves via video, our new regular service “Stockers Börsencheck” should not be missed. On our page Together with our product expert Thomas Wolf, the stock strategist analyzes the stock markets every two weeks. With stock market experience of more than 35 years, stock professional Stocker has worked in UniCredit Research in various functions as a capital market strategist for over 25 years. Our expert for securities investment solutions is available to assist him Thomas Wolf. “We like to take up current issues and analyze the situation on the stock markets,” explains Wolf. “We recently discussed the influence of leading indicators, for example,” adds Stocker.

The contributions can be found on or on YouTube.

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This article first appeared in onemarkets magazine (HypoVereinsbank – UniCredit Bank AG)

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