TURBULENCE ON THE BOND AND STOCK MARKETS

Am Mittwochabend hat die Fed einen weiteren Zinsschritt von 0.50% beschlossen. Der Federal Fund Rate liegt per 06.05.2022 bei 0.83%. Die Rede von Jerome Powell, welche er jeweils kurz nach der Publikation von Entscheiden hält, liess die Aktienmärkte am selben Abend vorrücken. Am gestrigen Tag (05.05.2022) rasselten vor allem der NASDAQ mit einem Minus von knapp 5% und der Dow Jones mit einem Minus von über 3% in den Keller. Die Märkte realisieren langsam die Zeitwende.

Rückblickend auf die letzten 12 Monate erzielte der NASDAQ ein Minus von 21%, der Dow Jones ein Minus von 13%, Euro Stoxx 50 notiert 15% tiefer und der SMI 8.50%. An den Aktienmärkten verlief es für die Marktteilnehmer nicht sehr erfreulich. Eine Übersicht bildet die untenstehende Tabelle, welche die Rendite seit Jahresstart zeigt.

 

Stock indexValue as of 05.05.2022%Ytd
DOW JONES32997.97-9.19%
S&P 5004146.87-12.99%
NASDAQ12317.69-21.27%
EURO STOXX 503696.63-14.00%
DAX13902.52-12.48%
FTSE MIB23759.71-13.12%
SWISS MKT11877.27-7.75%

 

In addition to the rising interest rate environment, the far-reaching lockdowns in China and the war in Ukraine are creating further unfavorable conditions for the markets.

Rising interest rates are also leading to rising yields on the bond markets. Yields on 10-year government bonds reached new highs this week. In the USA one receives for the 10-year Treasury bond at present approx. 3% interest, for the 10-year Eidgenoss still 0.84%. 12 months ago, the yields were at 1.71%, respectively – 0.462%. Within one year, interest rates have risen by 1.89% in the USA and 1.30% in Switzerland. The table below shows the increase in yields for 10-year government bonds in the respective countries over the last 12 months:

 

CountryInterest rate current 10yInterest 12 months agoΔ
United States3.057%1.172%1.89%
United Kingdom1.961%0.510%1.45%
France1.569%-0.162%1.73%
Germany1.041%-0.503%1.54%
Italy3.036%0.528%2.51%
Spain2.142%0.203%1.94%
Netherlands1.320%-0.385%1.71%
Switzerland0.839%-0.462%1.30%
Japan0.220%-0.004%0.22%

 

The rising interest rates have consequences for bond portfolios, which are traditionally held by market participants who want to avoid high market fluctuations. Looking at the Swiss Bond Index SBI from 03.01.2022 to 03.05.2022, we see a loss of 8.22%. That bonds are resistant to fluctuations in value cannot be confirmed for this short observation period.

In various discussions with clients and appraisers, despite the turnaround in interest rates, we come to the conclusion that the values of the properties should remain stable over the next few years. For example, market participants assume that capitalization rates will remain stable in the short term despite the rising interest rate environment and that demand for real estate will remain high. As a result, yields on investment properties are likely to remain low. However, anyone buying new properties today should be aware that there could be a decline in value in the future. An exact calculation of the risk/return profile is therefore highly recommended for the property and the associated financing.

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