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Money Bullish despite Corona RBC survey: Institutional investors as bullish as not since 2018

16:41  08 april  2020
16:41  08 april  2020 Source:   finanzen.net

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 German industry is on the verge of an order slump due to the corona crisis © Reuters / FABIAN BIMMER Steelworkers stand at a furnace at the plant of German steel company Salzgitter AG in Salzgitter Berlin (Reuters) - German industry is facing a vigorous crisis due to the coronavirus crisis Order decline before. New business in February was better than expected and companies only received 1.4 percent fewer orders than in the previous month.

The protective measures against the corona virus are causing the economy to collapse in many countries around the world. Nevertheless, institutional investors are as bullish as they have been for a long time.

TANNEN MAURY/AFP/Getty Images © Provided by Finanz.net TANNEN MAURY / AFP / Getty Images

• The survey shows: A large part of the respondents remains calm and is sure, the stock markets will recover again

• Ricky Sanders is bullish on the stocks and holds Quarter with negative GDP for acceptable

• As long as the number of infections does not decrease, not much will change in the current situation - afterwards there should be above-average values.

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The measures against the spread of the Corona Virus not only affect the freedom of movement countless People from all over the world: factories have stopped producing, stores remain closed and tour operators and airlines have had virtually all of their business under their feet. This leads to a massive slump in trade and the economy, which is why the international stock markets have been plummeting for a few weeks now. The global investment bank RBC Capital Markets surveyed 185 institutional investors at the end of March / beginning of May to assess the situation on the stock exchanges.

The majority remains optimistic

According to MarketMatch, the survey found that the majority of investors surveyed are as bullish as they have been since a survey in the first quarter of 2018, writes Lori Calvasina from RBC. According to the RBC, investors looked at attractive asset valuations, had confidence in the US central bank that it could support the economy financially in the crisis, and were sure that the economic damage to the crisis would be overcome - all of that was true they are very bullish and optimistic about stocks.

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According to the figures, most of the respondents do not believe that the crisis has bottomed out, but they initially view the S&P 500 index as bearish: more than half of the respondents assume that it will only take three months rising again. However, they also assume that the low point would be reached at over 2,100 points. The S&P 500 may then reach the 3,000 point mark by 2021. They justify this with the assessment that normal business life can take place again before the end of September this year.

Disproportionate flight of shares

In a telephone interview with CNBC's Halftime Report, hedge fund expert and CEO of Eminence Capital Ricky Sanders is also bullish: his calculation compares the $ 10 trillion market capitalization generated by the flight of stocks with the $ 500 billion loss that may have been caused by the Corona Virus will arise in the 2nd quarter. He is of the opinion that a quarter with negative GDP is not that bad, since the second half of the year can already be considered, in which an economic upswing can be expected.

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Historically, the stock markets will soon recover

Just as the institutional investors surveyed by RBC trust the US central bank, the ECB is supporting the economy in the corona crisis with various packages such as the new pandemic emergency program and the decided 120 billion euro bailout. Michael Herzum, Head of Macro & Strategy at Union Investment in an interview with dpn-online is certain: "As long as the number of infections in the important economic regions does not decline, a sustained upward movement in stocks and corporate bonds is unlikely. The prospects remain constructive in the medium to long term. "

And: Although, according to his appetite for risk in the markets, he fell to the level of the global financial crisis in 2008 in mid-March, he notes that historically "equity markets generate significantly above-average returns over a year after extreme values"

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