Financial analysts are still pessimistic
Although the Swiss economy was somewhat stronger in May than it has been in the past few months, the majority of financial analysts are not so optimistic.
The CS-CFA index released on Wednesday rose only slightly to -32.2 points in May from -33.3 points previously.
Credit: EThamPhoto/Getty Images
Financial analysts’ forecasts for the Swiss economy changed little compared to the previous month. Most are still pessimistic. However, the current situation is somewhat more robust.
The CS-CFA index released on Wednesday rose only slightly in May to -32.2 from -33.3 previously. In March, the index fell to -41.3 points as a result of unrest in the banking sector.
With May declining, a gauge of Swiss financial analysts’ mood is now below zero for the 15th consecutive month and has thus been signaling an economic downturn for more than a year. According to experts, the economic prospects of the United States and Europe have remained more or less flat. Only for China did analysts sound significantly more pessimistic.
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Strong location, expensive real estate
But given the current economic situation, the respondents had a more optimistic picture. Here, the corresponding index rose by 12.1 to 32.1 points, thus improving for the third month in a row. So the strength of the global economy is also an advantage for the Swiss economy. After all, since the beginning of the year, economic data has often presented positive surprises, according to CS economists.
Meanwhile, high interest rates are slowly making their mark. According to the analysts surveyed, real estate valuations are too high in light of rising interest rates and the resulting lower earnings expectations. This applies to both residential real estate and real estate funds. Meanwhile, the majority consider other asset classes such as stocks or gold to be of fair value.
The possibility of interest rate cuts decreases
A relatively stable economic situation affects interest rate expectations. In April, nearly a quarter of those surveyed expected the US Federal Reserve to cut interest rates by the fall, according to CS, only 15% are now doing so. For Switzerland and the Eurozone, analysts expect more interest rate hikes.
Meanwhile, inflation expectations have changed little. The consensus in the US is that inflation will fall. Although the majority expects this also for Switzerland and the eurozone, about a third of respondents expect inflation to remain at a level that is still very high.
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