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Weaker-than-expected U.S. inflation data created a positive mood on the stock and bond markets. A broad-based easing of price pressure raised hopes among market participants that the record interest rate hikes by the U.S. Federal Reserve will come to an end sooner than expected and that interest rates could even be lowered again in the near future.

At the same time, it is assumed that a slide of the economy into recession can be avoided and that there will be a "soft landing", as the labor market and consumer sentiment among Americans remain robust. The economic situation in the euro zone is less uplifting. Industrial production increased less than expected after the orders piled up during the Corona pandemic were worked off and there continues to be slack with regard to new orders. The weak mood in this country was reflected in the ZEW index, a survey of financial market analysts. Both the current situation and economic expectations were assessed as weaker than forecast. An end to the recession in Germany and the euro zone is thus not in sight, which reinforces our current underweighting of this market. Meanwhile, the economic situation in China has stabilized. The boost after the end of the Corona measures was short-lived. In an environment of declining inflation figures, interest rates also fell significantly at both the short and long ends, and bond investors were able to record corresponding price gains. With their still shorter duration positioning and significant investments in near-money market assets, the bond side of portfolios did make decent gains. However, it was not possible to keep pace in full with the very positive market trend in the course of falling interest rates, especially as the gains on government bonds were also greater than those on corporate bonds, which are more heavily included in the portfolios. The stock markets also performed positively over the two weeks, with stronger gains in Europe than in the USA.

The local stock market also suffered from a weaker U.S. dollar from the perspective of the euro investor. The overweighted Japanese stock market also underperformed. The emerging markets, together with the Chinese stock market, developed in line with the industrialized countries. Untypical for the falling interest rate level, the value segment outperformed, from which portfolios with selected funds were able to benefit. The growth segment, on the other hand, suffered from the underperformance of the IT and communications services sector, where probably a bit too much "AI" hype has been priced in over the past few weeks and the market is allowing a bit more realism to return. The portfolios benefited from their high weighting in the healthcare sector, which outperformed.

Driven by the positive performance of the equity and bond markets, all Moventum portfolios also posted significant gains, with almost all allocated funds posting gains. Compared to the broad market, the portfolios were somewhat held back by the shorter duration positioning on the bond side and the somewhat more defensive positioning on the equity side. 

The PWM portfolio also participated in the positive market environment and recorded significant price growth. The positive contributions were broadly spread across all investment segments. The gold price performance stood out particularly positively, and the mixed funds also benefited above average from the performance on the equity and bond side. Aquantum Active Range, which was designed more as a hedging strategy, struggled in the environment of steadily rising equity markets, while the two long/short equity funds were caught on the wrong foot in terms of positioning.

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