Omicron worries have diminished, but market participants remain cautious ahead of FED meeting, expiration day and holidays. Crypto ETNs are on the sell lists with the price slide of Bitcoin and Co with high turnover.
14 December 2021. Frankfurt (Börse Frankfurt). After the recent sell-off, when the DAX quickly had the "ground pulled out from under its feet, trading has now been smooth," reports Jan Duisberg of ICF Bank. The investors would look again more soberly at the market. Even if the losses are not yet completely "equalized", the interest in shares and ETFs remains high. Duisberg does not expect new record sales or record highs in the old year, however: "Before the interest rate decisions of the central banks and the holidays, few market participants are repositioning themselves." At most, this could change with very good news... "Then investors may be forced to move."
Carsten Schröder of Société Générale also reported quieter trading days - but also more buying at 55 percent than selling, especially in equity ETFs, which formed the strongest trend at 68 percent. "We see the most activity here in global products like the UBS MSCI World Socially Responsible UCITS ETF (Dist) (LU0629459743)." U.S. stocks ranked second, he said. Interest in U.S. stocks is reflected primarily by the MSCI USA, such as the Xtrackers MSCI USA UCITS ETF 1C Price (IE00BJ0KDR00), he said. Sales are mainly seen in European equities such as the Euro Stoxx 50 iShares Core EURO STOXX 50 UCITS ETF EUR (Acc) (IE00B53L3W79) and the MSCI Europe: iShares Core MSCI Europe UCITS ETF EUR (Acc) (IE00B4K48X80).
Moderate turnover ahead of central bank decisions and expiration day
The situation is different at Lang & Schwarz: "Investors have taken advantage of the recent price losses to buy selectively - especially European stocks rather than U.S. stocks," on the other hand, Torben Bendt reports from his clients' trading. Investors with a global focus continued to rely on the MSCI World as a classic. However, trading is now "very quiet" after the turbulence at the end of November: Turnover is in some cases 50 percent below that of normal trading days - but this is "normal for the season", especially as expiration day and central bank decisions are imminent.
Investors are focusing more on safety, comments Hubert Heuclin of BNP Paribas, and there are good reasons for this: The headwinds from Omikron and inflation, as well as the upcoming central bank appointments, continue. There is the finger "quickly on the sell button", especially since the Stoxx Europe 600 had the best week since March.
Heuclin
Equities: US equities and emerging markets on buy
Over the course of the week, most buying was in U.S. equities, according to Heuclin. He registered inflows primarily in the Xtrackers MSCI USA Swap UCITS ETF (LU0274210672), the Invesco EQQQ Nasdaq-100 UCITS ETF (IE0032077012) and the iShares Core S&P 500 UCITS ETF. Sales occurred in the iShares Edge MSCI World Value Factor UCITS ETF (IE00BP3QZB59) and in German blue chips: iShares Core DAX UCITS ETF DE (DE0005933931).
Lang & Schwarz clients are buying into emerging markets: here, Bendt highlights the Amundi MSCI Emerging Markets UCITS ETF (Acc) (LU1681045370>) in particular.
But more exotic equity themes his also in demand, such as the WisdomTree S&P 500 VIX Short-Term Futures 2.25x Daily Leveraged (IE00BLRPRH06). The ETN tracks the volatility of the S&P 500 revers with 2.5x leverage.
Tech stocks in demand again
At Société Générale, the technology sector was the demand leader. Artificial intelligence was tracked here with the Xtrackers Artificial Intelligence and Big Data UCITS ETF (IE00BGV5VN51).
After warnings from the German Federal Office for Information Security issued the highest warning level of red and warned of vulnerabilities in much-used server software, related products were in demand among investors, Schröder reports, such as the WisdomTree Cybersecurity UCITS ETF USD Acc (IE00BLPK3577). Financials also emerged as a strong sector, with buying primarily in the Xtrackers MSCI Eur.Financ.ESG Scr.UE 1C (LU0292103651), he said.
Clients of ICF Bank bought in blockchain such as the Invesco CoinShares Global Blockchain UCITS ETF (IE00BGBN6P67), according to Duisberg.
Bandt identifies particular buying interest in stocks in theEnergy sector, such as in the Lyxor MSCI New Energy ESG Filtered (DR) UCITS ETF (FR0010524777).
But some are also going short U.S. tech stocks, buying the WISDOMTREE NASDAQ 100 3X DAILY SHORT ETC (IE00BLRPRJ20), a triple-leveraged ETN that benefits from a falling Nasdaq 100.
Fixed Income: Inflows in European government bonds.
Short-duration bond ETFs, such as Amundi Euro Corporate SRI 0-3 Y UCITS ETF (LU2037748774), as well as inflation products, such as Lyxor EUR 2-10Y Inflation Expectations UCITS ETF - Acc (LU1390062245), are in demand with Schröder. On the sell lists, however, he registers European government securities: there are sales of shares in the Amundi Prime Euro Govies UCITS ETF (LU1931975152) and the Euro Corporates Amundi Prime Euro Corporates UCITS ETF (LU1931975079>), which are "usually in high demand."
Medium-maturity European corporate stocks are finding sales at Heuclin through the iShares EUR Corp Bond 1-5yr UCITS ETF (IE00B4L60045), as safety is desired. Some clients sold high-yield U.S. corporate securities such as the iShares USD High Yield Corp Bond UCITS ETF (IE00B4PY7Y77)
Crypto ETNs: sentiment turns after heavy selling
As the prices of many crypto currencies have plummeted, the sell lists of crypto ETNs have also gotten much longer. Duisberg attributes the slump to profit-taking and doubts about regulation. "Cryptos are not out of the woods yet either." The turnover leader is the 21Shares Solana ETP (CH1114873776), followed by 21SHARES ETHEREUM ETP ETC (CH0454664027). Here, the sell-off had grown even more when Ether had broken through the $4,000 mark to the downside.
Bendt also reports long sell lists in cryptos: here, too, 21Shares' Ether product would be sold in particular, but also Ripple and Polkadot ETNs (CH0454664043) CH0593331561).
Shares | |
USA | Buys |
World | Buys |
Europe | Buys and Sales |
Emerging Markets | Buys and Sales |
Industries | |
Technology | Buys |
Financials | Sales |
Sustainability | Buys |
Energy | Buys |
Bonds | |
Corporate Bonds Europe | Buys |
High Yield Corporate Bonds USA | Sales |
Government Bonds Europe | Sales |
Cryptocurrency-ETNs | Buys and Sales |
by Antje Erhard, 14 December 2021, © Deutsche Börse AG