Bielmeiers Blog

DZ BANK

Selecting business news – analysing it – commenting on it. That’s the job of Stefan Bielmeier, Chief Economist and Head of DZ BANK’s Research and Economics Division, and of his team of analysts. In his blog, Bielmeier reports on economic developments in the world's most important economic regions, looks at trends in the international financial markets and states his position on current political events.

Bielmeier’s Blog picks out the essence of the daily data deluge for you – make use of his expert knowledge.
Corona crisis throws the euro zone back into 2005!

The cross-border corona lockdown led to a 12.1 percent quarter-on-quarter decline in gross domestic product (GDP) in the euro zone in the second quarter. This slump is not only historically high. GDP is now even only at the level of 2005! 15 years of economic activity have been set back within only two quarters. Despite the expected recovery, some of which will be strong, it will take some time to make up for this setback. A look at the large member states, for which initial calculations or estimates are already available, also shows the drama of the corona recession. In the second quarter of 2020 all countries had to record double-digit declines in quarterly rates. The German economy was the best performer. Here, the minus was 10.1 percent, in Italy -12.4 percent, in France -13.8 percent and in Spain even -18.5 percent. These were all unprecedented declines in economic output…

„Early“ and „late“ indicators in the crisis

Stock prices are generally considered to be „leading indicators“ of the economy. They are mainly based on expectations regarding the further development of corporate profits, i.e. they are directed towards the future. And since corporate profits are usually closely correlated with the economic ups and downs, stock prices should also provide a good forecast for the further course of the economy. By contrast, the labour market is considered a typical „lagging indicator“ for the economy. This is because companies usually need time to adjust their headcount to economic developments. New hires are preceded by a search and selection process, and layoffs due to a lack of orders or business closures also require a lead time. There is currently great optimism in the stock market, despite the severe corona crisis. Meanwhile, the labour market – at least in Europe – has so far reacted only very cautiously to the crisis. Does…

US economy plummets, hopes rest on support measures

The gross domestic product of the United States crashed in the first half of 2020. The latest growth figures from the second quarter show how deep the US economy has fallen: According to these figures, economic output fell at an annualized rate of almost 33 percent between April and June – the steepest decline in the US economy ever, at least in the period after the Second World War. Economic output already contracted in the first three months of the year at an annualized rate of 5 percent compared with the final quarter of 2019. The previous year’s level is a long way off. The Corona pandemic is to blame for the crash: fear of contagion and tough lockdown measures caused enormous losses, particularly in terms of investment and private consumption. The number of unemployed rose to dizzying heights, with the unemployment rate peaking at almost 15 percent in April….

Quick estimate of German gross domestic product – premiere with a historic slump in growth

For the first time, the Federal Statistical Office has published a quick estimate of the development of the gross domestic product in Germany within only 30 days of the end of the quarter. Previously, 45 days were usual. And this premiere starts right away with a historic result. Compared to the previous quarter, economic output declined by 10.1 percent after price, seasonal and calendar adjustments. The gap to the same quarter of the previous year is even more than 11 percent. It has never been so bad. The fact that first-quarter earnings were revised upwards slightly is hardly significant. The lockdown due to the corona pandemic from mid-March to May has put many sectors in a deep sleep and sent the economy into a rapid downward spiral. According to the German Federal Statistical Office, almost all demand components slipped into the red without any further details being given. Private consumer…

ifo Business Climate: The third rise in a row

The mood in German companies improved further in July. This is shown by the latest survey of the ifo Institute. The business climate index has risen from 86.3 to 90.5 points in the last four weeks. This is the third time in a row that this important pulse monitor for the German economy has accelerated. According to the common rule of thumb, this is considered a reliable indicator of a turning point. It can thus be assumed with some certainty that the German economy is now in a recovery phase again after the deep corona-induced slump in spring. In fact, the business expectations of companies for the coming months are more positive than they have been for around 1 1/2 years. This also shows that the German economy is convinced that the worst of the corona crisis has been overcome and that there will be a strong recovery in the…

Gold rediscovered as the oldest asset class

Sometimes things happen fast and even faster than you think. The gold price in USD has broken its all-time high from 2011. The old investment lady is quite convincing in 2020. So far this year, gold has even outperformed the well-trained US technology stocks on the stock market. The price of the precious metal has been rising in various currencies for some years now, which in our view suggests that gold is certainly living up to its reputation as a currency alternative. Now the magical USD 2,000 mark is on the gold agenda. The Corona crisis has abruptly turned the (financial) world upside down and shaken it up once. Although the waves on the capital market have calmed down again, political and economic uncertainties remain very high. In view of the rising number of new infections in the USA, a second wave of infections cannot be ruled out. To cushion…