05.11.2009
Q.I.K. Market Perspective IV/2009
Please find attached the summary and the table of contents of the new market perspectives. You can download the entire file "Q.I.K. Market Perspective – 4th Quarter 2009" at the end of this page.
SUMMARY
1. 3rd Quarter 2009 Summary
The rally on the international stock markets continued into the 3rd quarter. This time European stock indices topped the list. The Japanese stock market was the absolute laggard. In sector terms, banks showed by far the best performance, followed by insurances and the building sector. The more defensive sectors (such as utilities, telecom, health care), had a much poorer performance during the last quarter. All sectors under review achieved positive performances, although the discrepancy between the strongest sector (banks) and the weakest sector (automobiles) was significant.
Forecast for Q4 2009
The consensus forecastis for a U.S. dollar exchange rate of 1.45 for Q4 2009.
The Kathrein & Co. Dollar modelcurrently recommends selling ---> USD.
The Kathrein & Co. Dollar modelcurrently recommends selling ---> USD.
2. Interest Rate Expectations
The consensus forecast is for an increase of the 10 year Bund yields to 3.35% in the 4th quarter of 2009.
Short-term interest rates: Currently interest rate cuts are expected for the eurozone. The interest rate curve is steep, but rate hikes during the first half of 2010 can be seen from the forward curve in the U.S., Europe and Switzerland.
Short-term interest rates: Currently interest rate cuts are expected for the eurozone. The interest rate curve is steep, but rate hikes during the first half of 2010 can be seen from the forward curve in the U.S., Europe and Switzerland.
TABLE OF CONTENTS
1. Summary
2. Capital Market Review
2.1. Equity Markets - During the 3rd quarter the upward movement on the global stock markets continued. This time European equities were in high demand, while Japanese indices only achieved slight gains. Also performing well were the so called emerging markets. The major U.S. indices achieved gains of 15% on average, in local currencies.
2.2. Bonds - The Euro bond market gained 2.84 % in the 3rd quarter 2009.
2.3. Currencies - The USD lost 4.05 % against the EURO in the 3rd quarter.
3. Performance Review of Kathrein Funds - All mixed and equity funds showed positive returns, all bond funds had a positive and better performance than money market investments.
3.1. Performance Overview
3.2. Total Return Portfolio Management at Kathrein & Co. - Further decrease of volatility to levels before the collapse of Lehman Brothers. Stock weighting was gradually increased and was at 66% at the end of Q3.
4. Consensus Forecasts for Interest Rates and Currencies
4.1. Long-term Interest Rates - Bund yields increase to 3.35 %.
4.2. Short-term Interest Rates – Interest rate hikes expected for the first half of 2010.
4.3. Currencies – USD rate anticipated at 1.45.
5. Equities
5.1. Stock selection models – The quantitative stock selection models applied to the Kathrein & Co. equity funds, could not post any active results due to the fact that especially stocks with low scores outperformed.
6. Kathrein & Co. Bond Models
6.1. Duration (short-term) – strong demand for euro bonds expected.
7. Kathrein Currency Model - Positive contributions due to dollar hedges during the quarter.
7.1. Long-term dollar model (Purchasing Power Parity) – Long-term model price at 1.29.
2. Capital Market Review
2.1. Equity Markets - During the 3rd quarter the upward movement on the global stock markets continued. This time European equities were in high demand, while Japanese indices only achieved slight gains. Also performing well were the so called emerging markets. The major U.S. indices achieved gains of 15% on average, in local currencies.
2.2. Bonds - The Euro bond market gained 2.84 % in the 3rd quarter 2009.
2.3. Currencies - The USD lost 4.05 % against the EURO in the 3rd quarter.
3. Performance Review of Kathrein Funds - All mixed and equity funds showed positive returns, all bond funds had a positive and better performance than money market investments.
3.1. Performance Overview
3.2. Total Return Portfolio Management at Kathrein & Co. - Further decrease of volatility to levels before the collapse of Lehman Brothers. Stock weighting was gradually increased and was at 66% at the end of Q3.
4. Consensus Forecasts for Interest Rates and Currencies
4.1. Long-term Interest Rates - Bund yields increase to 3.35 %.
4.2. Short-term Interest Rates – Interest rate hikes expected for the first half of 2010.
4.3. Currencies – USD rate anticipated at 1.45.
5. Equities
5.1. Stock selection models – The quantitative stock selection models applied to the Kathrein & Co. equity funds, could not post any active results due to the fact that especially stocks with low scores outperformed.
6. Kathrein & Co. Bond Models
6.1. Duration (short-term) – strong demand for euro bonds expected.
7. Kathrein Currency Model - Positive contributions due to dollar hedges during the quarter.
7.1. Long-term dollar model (Purchasing Power Parity) – Long-term model price at 1.29.