In the latest edition of our monthly report:
Editorial
Trump 2.1 vs. Trump 2.0
First words, then deeds;
60% on Chinese products and 20% on European ones; and
Reality will differ from campaign slogans.
What consequences can we expect for the markets?
Financial markets, and systematic strategies in particular, have not learned the lessons of Trump's first presidency. As in 2016-2020, the gap between Trump 2.0 and 2.1 will be significant, just as it was between Trump 1.0 and 1.1.
- by Kim Muller, CIO, Probus Pleion Suisse SA
Assessment of the economic situation
The oceans separating the USA from Europe and the rest of the world have never been wider. On the one hand, near-economic euphoria; on the other, persistent gloom. Commodities remains weak, except natural gas.
US economic activity continues to improve;
Natural gas up sharply; and
Argentina president's policies inspire the Trump team.
What about the SNB's monetary policy?
The SNB will update its monetary policy for the last time this year on Wednesday, December 11. On this occasion, the market is expecting a further rate cut of 0.25%, but it's a safe bet that if this comes to pass, the effect on the franc's exchange rate will be rather modest. Given the dynamics of recent months, some are already talking of a return to “zero” or even negative rates. We do not believe in the latter possibility, despite the fact that the franc will remain strong in 2025.
Financial markets during the month
The election of Donald Trump has only accentuated the outperformance of US equities, driving the dollar to its highest level of the year. Gold is taking a pause, while Bitcoin is enjoying euphoric success.
US equities, what else?;
French debt on a par with Greek debt; and
The unhealthy euphoria surrounding cryptos.
Our convictions
Comments on investment decisions
The broad Republican victory has polarized equity markets, leaving a choice between a richly valued but buoyant US market and modestly valued but trendless international markets. USD yields on the short-to-medium end are attractive, while the yellow metal has paused in its ascent.
Equities;
Bonds;
Precious metals, listed real estate (REIT); and
Currencies.
Performance summary
Equity performances; and
Performance of bonds, currencies and commodities
Disclaimer
This document has been prepared using sources believed to be reliable but should not be assumed to be accurate or complete. The statements and opinions it incorporates were formed after careful consideration and may be subject to change without notice. The author and distributors of this document expressly disclaim any and all liability for inaccuracies it may contain and shall not be held liable for any damage that may result from any use of the information presented herein. Past performance is not indicative of future results. Values of an investment may fall as well as rise. This document is intended for information purposes only and should not be construed as a recommendation, an offer or the solicitation of an offer to buy or sell any investment products or services. The use of any information contained in this document shall be at the sole discretion and risk of the user. Prior to making any investment or financial decisions, an investor should seek individualised advice from his/her financial, legal and tax advisors that consider all of the particular facts and circumstances of an investor's own situation.
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