The Current Economic Situation
The global economy is facing increasing uncertainty, often referred to as “panic mode.” This phase is characterized by heightened risks of a worldwide economic downturn, which particularly concerns investors in US stocks.
Main Reasons for Panic Mode
- Tariff Increases and Trade War: The tariff increases implemented by the Trump administration have led to an intense trade war, particularly with China and the EU. These tariffs are the most comprehensive in US history and significantly impact global supply chains.
- Change in Market Expectations: A survey by Bank of America reveals that 49% of investors expect a hard landing for the economy within a year, a significant increase since March. In contrast, only 37% now believe in a soft landing.
- Risks and Uncertainties: The trade war is seen as the greatest risk for a global slowdown, which could also affect the US dollar and corporate profits.
Impact on Investors
- Withdrawal from US Stocks: The reduced allocation to US stocks indicates that investors are becoming more defensive.
- Increased Cash Positions: Fund managers have raised their cash positions to 4.8%, a typical sign of panic mode.
- Defensive Investment Strategies: There is now a preference for utility, pharmaceutical, and basic consumer stocks.
Consequences for Consumers
The new tariffs could cause price shocks, such as a potential price increase of iPhones by up to 43%. This particularly negatively affects retirees, who are already struggling with the devaluation of their retirement funds.
Overall, there is a dramatic tightening of the economic environment with far-reaching consequences for both investors and consumers worldwide.