A strange calm can be observed on the capital markets, despite new infections worldwide and the near political risks of the US election. According to Deka chief investment officer Jörg Boysen, the pandemic is already entering its second round in many countries. Early termination of the lockdown in the USA has brought the economy good economic figures in recent weeks, but if the curve were to turn back into an exponential curve, new nationwide lockdowns would be necessary. Difficulties for the US economy are inevitable and the political system will be put to a further test. This will also be reflected on the stock markets.
Differences between the US and China, the upcoming US election, historic slumps in gross domestic product and declines in corporate profits in the past quarterly season are literally ignored by investors. This is probably also due to the fact that the prospects for a democratic US president according to Trump are not yet reflected in the share prices. A corona vaccine would provide for the normalization of the economy. Nor should the effects of monetary and fiscal policy be forgotten. According to Boysen, large credit and spending programs with the associated zero interest rate environment will give the financial markets a further boost, but the risks of infection and the upcoming US presidential election should not be ignored.
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