Separation of the Stock Markets from the Real Economy

Separation of the Stock Markets from the Real Economy

In addition to Corona and new heat records, the stock market is also turbulent. A veritable boom in industrial orders and a marked normalisation of business in traditional sectors is being observed. On the other hand, the price difference between pharmaceutical and tech stocks, as well as the rest of the market, is enormous, with the S&P500 being clearly in the red without the five tech heavyweights. The introduction of a vaccine could cause the market to exit these expensive stocks and experience a real “flight to quality value”.

According to BASF’s half-year report, global gross domestic product is estimated to have fallen by 6 percent in the first half of the year and global industrial production by 8 percent. There is a decline in production in the automotive industry. In the Chemicals segment, prices fell by 25% due to low demand, enabling BASF, as market leader, to increase its market share by 7%. Givaudan’s figures (+4% overall, +1% in industrialized countries and +9% in emerging markets) show that consumption is more stable than logistics, for example.

According to Kuehne + Nagel, the logistics group reported a 12% decline in ocean freight in the second quarter, down from 6% in the first quarter, and a 22% decline in air freight, down from 9% in the first quarter. A clear line is not visible.

In particular, the American and European stock exchanges are splitting up. The attention of investors is focused on the American market. The European stock exchanges on the other hand are in the background, despite the good news from the EU summit.

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