FRANKFURT (dpa-AFX) - According to the Swiss bank Julius Baer, the global equity markets are not facing a summer weakness. Instead, share prices are likely to move mostly sideways until the presidential election in the US. After the US elections, a further upswing on the stock markets is even possible towards the end of the year.

"The capital market year 2024 could be even better," said Lutz Welge, Head of Portfolio Management at Julius Baer Germany, in Frankfurt on Wednesday. Nevertheless, the trees would not grow into the sky. Equity valuations are no longer as attractive as they were a year ago.

The valuation of German equities, on the other hand, still points to a slight discount compared to historical averages. Welge sees catch-up potential here, particularly in the Dax. Cyclicals, for example, should feel a tailwind because the economy is developing better than feared. Investors should not be intimidated by wars and conflicts in the world: "The past shows that stock markets generally recover quickly from geopolitical events," explained Welge.

In addition, the situation in industry in Germany should improve in the second half of the year, added David Kohl, Chief Economist at Julius Baer. However, an upturn will not be easy. "Germany has overtaken the USA, France and the United Kingdom as the country with the greatest economic policy uncertainty," said Kohl. With its stable structure, Germany is finding it extremely difficult to adapt to current challenges.

Meanwhile, the global economy is switching to expansion mode. "Despite the restrictive monetary policy and weak domestic demand in China, the global industrial economy is picking up," said Kohl. The economy has coped with the severe tightening of monetary policy and can now expect relief over the course of the year. In Julius Baer's view, the US Federal Reserve was able to cut interest rates again for the first time in September and may make a further cut in December.

A look at the United States also shows that higher interest rates do not only have disadvantages for companies. "The rise in interest rates has rewarded US companies with larger deposits," said Kohl. The high cash holdings of companies in the USA had yielded more net interest than had to be paid for loans on the other side. In contrast, interest payments dominated for companies in the eurozone. However, unlike the Fed, the European Central Bank (ECB) has already started to cut interest rates./niw/ngu/jha/