Asset manager Fiduka: "At some point the central banks will discharge the debt of the states"

The financial markets will also be able to count on the backing of the central banks in the coming year.

The managing director of the Munich asset manager Fiduka, Marco Herrmann, is convinced of this in an interview with the FAZ: "In view of the high debt levels, the central banks are forced to support the financial markets." be more forced to intervene.

Markus Frühauf

Editor in business.

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Herrmann even assumes that the European Central Bank (ECB), the American Federal Reserve and other central banks that have bought or are still buying government bonds will go a step further: “In the course of climate change and the associated government investments, I can imagine that at some point the central banks will discharge public budgets by actually deleting their holdings of government bonds in a creative way. ”In this context, the managing director of the asset manager founded in 1971 by André Kostolany and Gottfried Heller considers an international solution to be more suitable than going it alone, for example, by the ECB.

Price pressure is decreasing somewhat

In his view, the pandemic will last longer than long thought. This affects monetary policy through inflation and supply chain problems. A stagflation like in the 1970s with interest rates in the double-digit percentage range is not to be expected. "Instead, we expect a 'grow flation': the global economy can grow by 4 percent in the coming year." At the same time, price pressure will decrease somewhat, since energy prices will no longer rise as strongly as this year, and so will the base effect from the temporary one VAT reduction in 2020 will be eliminated.

Nevertheless, Herrmann has not given the all-clear on the inflation front. Because the difficulties in the supply chains will, according to him, continue to cause inflationary pressures. In addition, climate protection has a price-driving effect. "We expect inflation between 2 and 3 percent in Europe in the coming year." Nevertheless, Herrmann currently seems very far away from hyperinflation. This also applies to the USA, although the inflationary pressure is higher there due to the looming wage-price spiral.

This can also be seen in the current preference of investors for the dollar.

For the Fiduka wealth managers, the euro will fail to make up ground against the dollar.

At the beginning of the year, the euro was 1.2349 dollars, it is now only 1.1270 dollars.

The fantasy of several rate hikes by the Fed should support the American currency.

In the euro area, there are no signs of a reduction in the mountains of debt, rather the opposite is the case.

"The new German government is very open to additional spending," says Herrmann.

The change of government in Germany could lead to a less solid financial policy in the entire euro zone and weaken confidence in the euro, write the Fiduka asset managers in their annual outlook for 2022.

"5 to 7 percent are possible with shares"

They are cautious about the next year.

Since the Corona crash in spring 2020, money has been easy to make.

“The price recovery since then cannot be repeated,” adds Herrmann.

However, he thinks a return of 5 to 7 percent is possible with stocks in the next year.

Asset managers can imagine the Dax between 16,000 and 16,500 points.

On Wednesday the Dax was at 15,500 points.

Herrmann sees no earnings opportunities on the bond market for the foreseeable future.

If the central banks, like the American Fed, begin to throttle their bond purchase programs and soon end them entirely, interest rates would rise and bond prices would fall.

"Earning money here will be very difficult."

It makes more sense to take liquidity from the bonds in order to be prepared for price setbacks on the stock markets.

These should be used as cheap entry levels.

“There is still a lack of alternative investment opportunities to stocks,” says Herrmann.

He observes price exaggerations above all in the United States, but the markets here are now a bit more rational.

"The coming year will be marked by price fluctuations because the central banks' liquidity supply will decrease", Herrmann is convinced.

Technology and digitization as well as topics related to climate change such as energy efficiency, renewable energies or power grids are attractive industries.