(Picture: © Sergej Khackimullin – Fotolia.com)
Zurich – Despite a weak global economy, mounting uncertainties, and political tensions, equity and credit markets rallied since the beginning of the year.
We believe that central banks’ monetary stimulus has been the major cause for the bull market in risky assets. 2012 has been a remarkable year. While the global economy weakened, market participants were worried about the European sovereign debt crisis, a potential Eurozone break-up and political tensions in the Middle East (Arabic spring and the conflict around Iran). On top of all that, just recently, we have to add the political tensions between Japan, China, and Taiwan. Who of us, considering the above mentioned factors, would have guessed that since the beginning of the year the S&P500 has gained 14%, the DAX 23%, and even the EuroStoxx 50 – including our troubled southern EMU member countries – has advanced almost 8%. (BH/mc/hfu)