Vaccination progress sets the pace

The US is setting a brisk pace: Already 20% of the population is fully vaccinated. In Europe and Switzerland, the vaccination campaigns are only about to take off. This, as well as the spread of new virus mutations, has an impact on the re-opening prospects.

While in the US a return to normality is getting closer and closer, in Germany, for example, the "emergency brake" is currently being discussed again. The number of new infections is still too high, and there is too much concern that the beds in the intensive care units of the hospitals will become scarce in the current third wave.

And the financial markets? They are brimming with optimism. The S&P 500, the leading index for American shares, is going from record to record. Within a year it has risen by around 50 %. So the stock markets expect the pandemic to be over soon and the world economy to recover from the shock.

In our view, the optimism is justified in principle. Various vaccines have been developed in record time, herd immunity is within reach and economic indicators are pointing upwards across the board. However, despite all this justified optimism, one thing must not be forgotten: Markets tend to exaggerate. If we look at some sentiment indicators, it seems as if many investors are currently ignoring the risks. Whenever that is the case, the probability of short-term setbacks increases.

We are not letting ourselves be put off by this and are convinced that we are currently well positioned. In addition, we have sufficient liquidity to buy in the event of any price dips.