Market sentiment turns: equities celebrate great comeback
Market sentiment turns: equities celebrate great comeback

28 November 2023 – With an impressive turnaround, the global stock markets are making a brilliant comeback. The MSCI World Index recently staged a rally not seen since 1997. And upswing in Central Eastern Europe: positive growth prospects and attractive stock markets.

Market sentiment turns up: Equities celebrate sensational comeback!

What an impressive turnaround! Just a few weeks ago, the MSCI World Index, a reflection of the global stock markets, was a whole ten percent below its record high. Stock market pundits spoke of a “correction”, a phase in which investors were rather skeptical about the future. But now, just four weeks later, the mood on the trading floor is one of optimism!

Return of optimism

The financial world has made a 180-degree turn. Experts on the futures exchanges are now expecting several interest rate cuts in the coming year. The stock market barometer, the MSCI World Index, has recouped almost all its losses. Investors are feeling optimistic again – a mood that is contagious.

Small investors bet on rising share prices

According to a recent survey, 45% of US small investors surveyed now expect share prices to rise over the next six months. At the end of October, only 24 percent were of this opinion. This is a clear sign that faith in the strength of the markets is returning.

Historic rise in the strength index

And here’s the kicker: the relative strength index of the MSCI World is showing a rally not seen since 1997. Within just 19 trading days, the index jumped from “oversold” to “overbought”. A development that amazes even hardened stock market veterans.

Possible breather in sight

However, this brilliant turnaround could also lead to a brief pause for breath. But one thing is clear: the global markets have made an impressive comeback, a sign of real strength and a reason for hope for investors worldwide. It looks like the MSCI World is setting the stage for an exciting financial year 2023!

Upswing in Central Eastern Europe: Declining inflation as a glimmer of hope

The economic news from Central Eastern Europe is cause for celebration: inflation is falling sharply in Poland, Hungary and the Czech Republic. After a phase of weaker economic activity, these countries are now finding their way back to economic growth. A glimmer of hope on the horizon!

The economic news from Central Eastern Europe is cause for celebration: inflation is falling sharply in Poland, Hungary and the Czech Republic. After a phase of weaker economic activity, these countries are now finding their way back to economic growth. A glimmer of hope on the horizon!

Labor market remains strong and boosts the economy

In these three Eastern European economies, unemployment remains at record lows while wage growth is high. This is a clear sign of a robust labor market that could continue to drive economic growth. Even though inflation could remain high in the coming year, the tight labor market shows that the economy is on the right track.

Central banks give the economy new impetus

The central banks in Poland, Hungary and the Czech Republic are ready to give the economy additional impetus by cutting interest rates. In Hungary, the key interest rate has already been cut from 13 percent to 11.5 percent. In Poland, this was followed by a reduction in the key interest rate from 6.75 percent to 5.75 percent. These steps point to a future strengthening of the economy.

Positive growth outlook and attractive stock markets

The International Monetary Fund (IMF) is forecasting growth of at least 2.3% for all three countries next year. This positive outlook could also benefit the other European stock markets. With attractive price/earnings ratios, which are well below their historical average, and attractive dividend yields, the stock markets in these countries offer exciting investment opportunities.

Perspective: Central Eastern Europe on the way up

In summary, Central Eastern Europe is facing a year full of hope and positive developments. Falling inflation, a strong labor market and encouraging steps by central banks paint a picture of economic recovery and stability. A reason for investors and economic observers to look to the future with optimism!

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