In the latest edition of our monthly report:
Editorial
The “Trump trades” called into question
Buy cryptos & Tesla / sell China & Europe;
Momentum strategy undermined; and
The market sets the tone for analysts, not the other way around.
What consequences can we expect for the markets?
At the end of 2024, we “dared” to recommend staying diversified, noting that Chinese and Swiss equities could be pleasant surprises in 2025. After “suffering” in 2024, common sense is back in 2025, and all the better for it.
- by Kim Muller, CIO (Switzerland)
Assessment of the economic situation
The European economy is stabilizing, but not shining, while in the US, the service sector and consumer confidence are showing signs of running out of steam. In Germany, the elections have resulted in a reshuffled landscape.
European economy less weak than expected;
Chaos in the physical gold market; and
Europe cannot replace American aid.
What about the SNB's monetary policy?
The SNB has just announced a spectacular profit of 80.7 billion for 2024, of which 3 billion will be distributed to the Confederation and Cantons. This amount should be seen in the context of the historic loss of -132.5 billion in 2022, the benchmark “annus horribilis”. This result is naturally welcome and will enable the SNB to look to the future with greater serenity. It will also enable it to implement its future monetary policy without hindrance.
Financial markets during the month
European and Chinese equity markets up, while US indices stagnate, weighed down by the Mag 7. Bond yields slip back in the wake of softer US economic data.
European outperformance continues, China follows;
US yields fall on the back of a “slowdown”; and
Gold consolidates (slightly) its recent rise.
Our convictions
Comments on investment decisions
The DeepSeek shock continues to weigh on US tech, while European stocks continue to catch up. Nestlé awakens the SMI and Chinese techs send the Hang Seng soaring. Gold above its October high, while German residential REITs struggle to take off.
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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