Stress test last quarter

Which factors have the greatest impact on the stock market in the final quarter of 2020?

Just a quick reminder: In 2016, both the election of Donald Trump as US President and the UK’s exit from the EU were predicted to fall sharply on the stock markets. The opposite happened back then: on the following trading days, the stock markets turned up again extremely quickly and astonished many crystal ball experts. Once again the old stock market adage had come true: Political stock exchanges have short legs.

But how is it this time? The majority of Germany’s private investors assume that the coming months on the capital markets will essentially be influenced by two factors; due to the upcoming election of the American president and the further course of the corona pandemic. More than 77 percent of the vote fell on these two factors. Just under 15 percent of the participants believe that monetary policy decisions by the central banks will have the greatest impact on market developments.

On the other hand, it seems interesting that the majority of investors apparently consider a no-deal Brexit to be expected and assume that this scenario is already priced into the prices. At least just under 8 percent of the participants answered that a non-agreement between the European Union and Great Britain will have the greatest impact on the stock exchanges in the last quarter of the current year.

The results of the current trend survey by the German Derivatives Association (DDV) make it clear that investors keep asking the same questions, follow major events such as the election of the US president with eagle eyes and are very likely to position and secure themselves accordingly in their portfolios. To make matters worse this year, nobody can really foresee whether the second wave of pandemics will mean another accelerator of fire for stock exchanges worldwide.

In this respect, structured securities are ideally suited as an addition to the allocation of your own portfolio. Experienced investors and, above all, traders know how to hedge their portfolios accordingly. If in doubt, all others should talk to their advisor.

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