The summer rest is cancelled this year. The crises of this world are intensifying everywhere. Of course, the development of the trade conflict between the USA and China is the focus of discussion on the international financial markets, and here, too, the escalation screw continues to turn lively. The consequences for the real economy are slowly beginning to emerge. World trade growth is stagnating and growth prospects are darkening – the export-oriented economies are disproportionately affected.
This does not leave the balance sheets of companies unscathed. In the current reporting season there have already been some profit warnings and the quality of the corporate balance sheet has deteriorated on average. Overall, the outlook has deteriorated noticeably. The stock markets have so far ignored this development. However, with the announcement that tariffs in the USA for Chinese imports are to be expanded further, the dams have now been broken. Even if the outlook for the equity markets is not promising, the negative yields on bonds with good credit ratings could have a stabilizing effect on the equity markets. In the search for positive returns, dividend yields are the most obvious. Although these are unlikely to maintain the current level of around four percent in the Eurostoxx50 in the coming quarters, they should not fall below three percent in the further course of the year. In comparison to bonds, equities are therefore still a positive investment, but one should have a somewhat longer investment horizon.