With new record highs in the Dow Jones and S&P 500, shares from the USA in particular are in demand. The reporting season is a positive market support. Tech stocks benefited from this, while value stocks were sold.
26 October 2021. Frankfurt (Börse Frankfurt). New record highs in the Dow Jones (US2605661048) and the S&P 500 (US78378X1072) in the United States have carried the mood on the market also in Frankfurt. As a result, DAX (DE0008469008) is heading towards the 16,000 mark, after trading below 15,000 at times in the previous week.
"Equity markets are trying to break out to the upside, albeit slowly," Jan Duisberg of ICF Bank also reports. "This upward trend is mainly driven by the U.S. stock markets and also makes sense in the continued inflationary environment." In the last six weeks already, the U.S. market has gained significantly more, he said, even if no new records have yet been set there on the NASDAQ.
"Europe is being left out." However, worries about the Evergrande real estate group in China were also easing here, and it was positively received that a new coalition seems to be emerging in Germany, which "does not turn everything upside down."
Equities were particularly in demand in this environment, in his oderbooks especially the the BNP Paribas Easy MSCI World SRI S-Series 5% Capped UCITS ETF EUR (LU1615092217), explained Duisberg.
Fabian Wörndl of Lang & Schwarz sees - in addition to the common themes of inflation and interest rates - also mainly the reporting season as a positive market support: "Most figures are good. However, one should not forget that the previous year's quarter was particularly difficult." But the mood is good. Fabian Wörndl agrees that equities in particular are being bought: He also sees the MSCI World as a favorite. Among the most traded products at Lang & Schwarz is the iShares Core MSCI World UCITS ETF USD (Acc) (IE00B4L5Y983).
"Flows are fine, markets are recovering," Carsten Schröder of Societé Généralé sums up the week. "Especially the quarterly figures from the U.S. animate the investors:inside to buy. With this tailwind, we expect prices to continue to rise." He said there were currently inflows in both the MSCI World and the S&P 500, with many buying the classic iShares Core MSCI World UCITS ETF USD (Acc) (IE00B4L5Y983), as well as the Amundi S&P 500 ESG UCITS ETF DR - EUR (C) (< LU1437017863> and the iShares Core S&P 500 UCITS ETF USD (Acc) (< IE00B5BMR087>). Value stocks, on the other hand, were sold, he said. "With a tech bull market, value stocks are often no longer in demand," Schröder classifies. As a result, the iShares Edge MSCI World Value Factor UCITS ET (IE00BP3QZB59) was on the sell side, as was the Lyxor EURO STOXX 50 (DR) UCITS ETF - Acc (FR0007054358).
Schröder
Amundi: USA and emerging markets in demand
An ETF report by the fund company Amundi shows that ETF investors have recently invested primarily in the U.S. market and emerging markets, while funds have flowed out of Europe. In total, 803 billion euros have already flowed into ETFs this year, with 80 percent in the U.S., 16 percent in Europe and 6 percent in Asia. Equities have been the most popular, accounting for almost three-quarters of all inflows.
Besides the US, Wörndl sees particularly strong demand for Asian und Russian companies. "Also right up front is the iShares MSCI EM Asia UCITS ETF (Acc) (IE00B5L8K969). Commodity demand and, as a result, multiple supply shortages would also be reflected in the ETF market. Continued high demand for lithium and the GLOBAL X LITHIUM ETF - USD ACC (<US37954Y8553>), he said.
Future themes trade strongly
ICF Bank also saw strong interest in various future themes ranging from hydrogen to cyber security: For example, the L&G Hydrogen Economy UCITS ETF USD Acc (IE00BMYDM794), which had stood at less than 6.50 euros as recently as early October, was in high demand, it said. The health theme is reflected in the L&G Healthcare Breakthrough UCITS ETF (<DE000A2PPAV6<), which has gained a good 13 percent since the start of the year. The L&G Cyber Security UCITS ETF (EUR) (IE00BYPLS672), with a good 20 percent year-to-date performance, is also among the most sought-after ETFs at ICF Bank, the bank said.
After restrained past weeks, according to Wörndl, the topic of sustainability is gaining momentum. In the wake of this, the HANetf iClima Global Decarbonisation Enablers UCITS ETF (IE00BNC1F287) alone has gained 6 percent year to date in October.
With interest rate hopes rising, Schröder captured inflows in the banking sector, both in the U.S. and in Europe and the world. "Institutions with good business models can benefit from rising interest rates going forward." He said the Lyxor STOXX Europe 600 Banks UCITS ETF - Acc (LU1834983477) reflects those hopes with a gain of nearly 10 percent in one month.
Cryptos: New all-time highs in bitcoin and Ethereum generate interest
With a new all-time high in Bitcoin, the crypto market received a boost again. At more than $66,000 per coin, the oldest cryptocurrency was more expensive than ever before. The second largest crypto-currency, Ethereum, also reached a new record of more than 4,350 U.S. dollars. "This development has once again led to increasing turnover in crypto ETPs in recent days," said Duisberg, referring to the order book. Already in the previous week, the approval of a Bitcoin Future ETF in the US had driven the market.
At ICF Bank, for example, the WisdomTree Bitcoin ETN (GB00BJYDH287) and the 21Shares Cardano ETP (CH1102728750) were particularly in demand. They are very liquid, he said, and the Cardano ETP in particular is also trading with tight spreads.
At Lang & Schwarz, "generally all cryptos are in demand this week," says Fabian Wörndl, but the 21Shares Solana ETP (CH1114873776) stands out.
Bonds: Either with inflation protection or U.S. government securities
In the bond market, the theme of inflation protection was once again in demand. The Xtrackers II Global Inflation-Linked Bond UCITS ETF (LU0290357929), which is now also traded on Xetra, stood out here at Lang & Schwarz.
Carsten Schröder also sees inflation-linked fixed-income products on the buy side, but also U.S. government bonds such as in the iShares USD Treasury Bond 7-10yr UCITS ETF (IE00B1FZS798). On the other hand, it saw outflows in European corporate stocks, such as the iShares Core Euro Corporate Bond UCITS ETF (Dist) (IE00B3F81R35), and short duration products, including the PIMCO US Dollar Short Maturity Source UCITS ETF (<IE00B67B7N93>).
Shares | |
USA | Buys |
World | Buys |
Europe | Sales |
Industries | |
Banks | Buys |
Technology | Buys |
Hydrogen | Buys |
Bonds | |
Inflation-protected | Buys |
Government bonds USA | Buys |
Corporate Bonds Europe | Sales |
Krypto-ETNs | Buys |
by Antje Erhard, 26 October 2021, © Deutsche Börse AG