The current economic situation is characterized by increasing panic, as experts fear a “hard landing” of the global economy. These developments significantly affect the stock market as well as private investors.
Background and Causes
Tariff Increases by the USA: One of the main causes of this uncertainty is the massive tariff increases by the Trump administration, considered the largest in U.S. history. These measures have triggered shockwaves worldwide and severely strained existing trade relations.
Trade War: The escalation of the trade war between the USA and its global partners such as China and the EU intensifies concerns about a recession. Many experts see this conflict as the biggest risk for a global economic downturn.
Impact on the Stock Market
- Withdrawal from US Stocks: Sentiment among fund managers has rapidly deteriorated, leading to a massive withdrawal from US stocks. According to Bank of America, the allocation to US stocks has fallen more sharply within two months than ever before.
- Increased Cash Holding: Fund managers are increasing their cash holdings to 4.8%, a sign of defensive behavior in the market. This indicates that investors are willing to hold liquidity rather than invest in riskier assets.
Forecasts for the Global Economy
- Probability of an Economic Downturn: The likelihood of a global economic downturn within the next twelve months has quadrupled according to Bank of America. In April 2025, 49% of surveyed investors expect a so-called “Hard Landing”, while in March only 11% anticipated this.
- Recession Fears: Analysts at JPMorgan now estimate the probability of a recession at up to 60%. However, these assessments could be even more pessimistic.
Strategic Adjustments
In this uncertain situation, investors tend to:
- Prefer Defensive Investments: such as utility, pharmaceutical, and basic consumer stocks.
- Avoid technology, industrial, and bank stocks.
For private savers, it is recommended to:
- Exercise patience; historically, markets have often recovered from crises.
- Establish well-diversified portfolios or adjust conservative withdrawal plans for retirees.
Overall, there is a picture of great uncertainty with far-reaching consequences for global markets and private finances.