Bielmeiers Blog


Stefan Bielmeier, DZ BANK’s Chief Economist and Head of Research, comments on economic developments in Europe, the USA and the Emerging Markets, assesses international financial market trends and gives his opinion on politics and economic policy – concisely, succinctly and to the point.

The economics and financial market experts of DZ BANK’s Research division support Stefan Bielmeier in his blog.

Find out more in Bielmeier‘s Blog about DZ BANK Research’s current topics, the experts’ focal areas, and their general viewpoints on the latest developments.
German small and mid caps: Success in a niche market thanks to unbridled innovative strength

At the end of 1987, the DAX, MDAX and SDAX stood at 1,000 index points. While today the DAX and SDAX are almost on a par at around 12,500 points, the MDAX is more than twice as high at over 26,000 points. Although the DAX is the best-known of the indices, the small indices (including the TecDAX) have outperformed the DAX in terms of price development over the past 15 years. The success can be attributed to the composition of the smaller indices which contain many of the so-called hidden champions, i.e. the second-tier world market leaders. Driven by innovation and a focus on niche markets, these small companies are often able grow faster than their large DAX counterparts. Smaller companies develop better in upswing phases but also suffered major setbacks during the 2008/09 financial crisis. Our analysts currently see opportunities for small and medium-sized companies due to their activities…

Franco-German horse-trading – refugees to be taken back in return for a euro zone budget

The euro zone is to get a budget of its own! After months of to-ing and fro-ing, the government heads of the two largest EU countries have agreed on a common agenda for the future of the E(M)U, the „Meseberg Declaration“. However, the agreement has more in common with a horse-trading deal between Merkel and Macron than with a reform plan for the monetary union, with both heads of state keen to score points on domestic policy themes: refugees are to be taken back in return for a euro zone budget. In matters of migration policy, the Chancellor is trying to pacify her Bavarian sister party that is to face state elections in the autumn, and thereby prevent the government from falling apart. France’s President, on the other hand, is out to pursue his prestige project of a Europe based on solidarity backed by greater financial mutualisation. Despite all the…

Election in Turkey: Little clarity, lots of question marks

Next Sunday sees presidential and parliamentary elections in Turkey that have been brought forward. At the same time as the ballot, the still controversial constitutional reform adopted in spring 2017 by referendum comes into force. It strengthens the powers of the president vis-à-vis the Turkish parliament. New elections were not actually scheduled until the end of 2019, but President Erdogan brought them forward to 24 June this year, no doubt not least with the intention of securing his own re-election. According to current opinion polls it is doubtful whether his plan will succeed. Neither Erdogan nor the election alliance of AKP and the nationalist MHP can at present be sure of gaining an absolute majority of the votes. With a view to the composition of the future parliament, what will above all count is whether the pro-Kurdish HDP manages to poll more than the 10% required for a single party…

Equity market: The German marathon stock corporations

As the Americans say, betting on a “disaster du jour” on the equity market is a popular pastime among investors. High returns beckon in case of success. Without having specific company and sector expertise, such investments (e.g. turnaround at GE) still constitute superficial bets that may or may not work out. It can also take more years than planned for the “investment case” to pay off – if at all. Examples of this in recent years are, for example, shopping mall and shopping centre shares (including Sears) in the US or turnaround speculation on German bank stocks in Germany. Investors that “fall for” such special topics and support their investments with the corresponding financial firepower, lose valuable time. During this time, the markets continue to rise (the historical base rate in the DAX is around eight percent) so that opportunity costs accrue quite happily in the form of foregone profits….

ECB monetary policy on autopilot until the summer of 2019

At yesterday’s meeting of the Governing Council, the European central bankers decided to extend the asset purchase programme (APP) until the end of the year. If inflation moves in the direction desired by the central bank, then the volume of monthly net asset purchases will be reduced to EUR 15bn from October. Under the conditions mentioned, net purchases would then end in December. In order to pre-empt any undesired speculation on rate hikes, the ECB has radically adjusted the forward guidance on its benchmark rate. The central bankers now assume that interest rates will remain unchanged at least through the summer of 2019. What is unusual in this context is that the ECB is committing itself for such a long period of time. This has been interpreted by market players as a „dovish“ signal and the Bund Future responded with price gains. However, it is impossible to deduce with certainty…

The Fed embarks on a steeper rate-hike path according to the “trial and error” principle

The Fed remained yesterday evening on the monetary-policy tack which it has been pursuing in recent months, raising the fed funds target range by 25 basis points. At the same time, the expectations for the rate-hike trajectory going forward were revised upwards: the new median forecast by FOMC members sees the Fed tightening monetary policy twice more over the remainder of the year. And for the coming year a total of three tightening steps can be expected. As a result, the Fed’s overall tenor has shifted in the direction of a slightly more restrictive monetary-policy stance. FOMC members’ individual projections for GDP growth reflect confidence about the future trend of cyclical momentum while their prediction for inflation is that the rate of change is destined to remain moderate at only marginally in excess of 2%. The verdict was reached unanimously. By and large, the Federal Reserve has acted in accordance…