Assessment of the current market environment

A nuanced economic and market phase is expected over the months ahead. In the US, attention will be turned to the resilience of income-driven consumption and the sustainability of technology-led investment. In Europe, infrastructure and defence spending are gaining in importance – including with regard to Switzerland. At the same time, monetary policy decisions, volatile currencies and selective opportunities across all asset classes are set to shape the market environment.

Two factors will be key for the US economy over the months ahead. Firstly, it will be important to see whether US consumption, which is increasingly reliant on higher income brackets, can maintain its current level. Secondly, there is the question of the extent to which the strong support for the US economy provided by technology investments in 2025 will persist. While the first factor may ease somewhat, the second is likely to remain a growth driver for the time being. However, it cannot be guaranteed that its impact will remain as strong as it was in 2025 across all quarters of the year ahead. Infrastructure investments and rising defence expenditure will be important in the Eurozone in 2026 to offset the adverse effects of increased tariffs on exports to the US. This will also play a role in the development of the Swiss economy, which has historically been greatly influenced by Eurozone growth.

Currencies

Following a year of broad depreciation for the US dollar in 2025, the greenback is once again expected to exhibit greater volatility in both directions against the euro and Swiss franc over the coming weeks. This will mainly be driven by the US Federal Reserve’s monetary policy decisions in the first and second quarters, which will be based on persistently uncertain inflation and growth dynamics and delayed economic data. On an inflation-adjusted purchasing power basis, neither the US dollar nor the Swiss franc is attractively valued. However, the Swiss franc will be supported in the long term by lower government debt and significantly lower inflation.

Bonds

Yields on Swiss government bonds find themselves at a multi-year low. Key interest rates currently stand at zero and are expected to remain there. The European Central Bank is also likely to keep key interest rates unchanged. As anticipated by market participants, the US Federal Reserve decided to cut its key interest rates by 25 basis points, meaning the target range now stands at between 3.5% and 3.75%. The interest rate cut was driven by concerns about a weak labour market, while stubbornly high inflation is seen as temporary. The potential for further interest rate cuts remains low and return prospects on the bond markets continue to be constrained. Credit spreads are close to their historic lows. We are therefore maintaining our underweight position in bonds and a slightly longer to neutral duration positioning.offer little in terms of compensation in the event of negative developments.

TAA Balanced CHF

Real estate

The Swiss real estate fund index (SWIIT) has once again hit a record high. Positive sentiment towards Swiss real estate investments persists, reflected by the many newly announced capital increases in recent weeks. Low interest rates, high immigration and insufficient construction activity remain the fundamental drivers of this positive trend. Demand for indirect real estate investments is likely to remain robust. Swiss real estate funds continue to look more attractive than bonds and less volatile than equities. As such, we are maintaining our overweight position.

Equities

The global equity markets have been influenced by fears of an AI bubble, on the one hand, and US interest rate expectations, on the other. Early in the month, concerns over the concentration and high valuations of individual US tech firms dominated the picture, leading to a market correction of in excess of 3%. However, equities went on to rebound on expectations of a possible rate cut by the US Federal Reserve. Viewed over the year as a whole, the global equity markets delivered an above-average performance in 2025 despite the sharp correction in April linked to “Liberation Day” and concerns over a potential trade war. This positive trend also applies when measured in Swiss francs, notwithstanding the marked depreciation of the greenback. The Swiss equity market once again demonstrated its reliability as an investment region over the past 12 months, combining stability with long-term growth potential. In 2025, it put in an extremely strong performance. We are closing our position in global quality stocks and investing the proceeds in the MSCI World All Country Index, which comprises an exposure of roughly 10% to emerging markets. We are remaining neutral on equities.

Commodities

The commodity markets performed in line with last year’s overall trend during the past month, albeit to a less pronounced degree. Precious metals recorded extraordinarily strong returns, with gold advancing 60% since the start of 2025. An overweight position in gold still appears justified, as the drivers of strong demand for the yellow metal remain intact: falling interest rates are providing support, while extensive central bank purchases are also set to continue. Industrial metals likewise performed very well: since the beginning of 2025, they are up more than 21%. Over the year, agriculture was the weakest sector, while the energy sector only delivered slightly better results. We are maintaining our neutral position in the overall commodity market.

Private markets

Private markets, and private equity in particular, continue to show signs of recovery spurred by rising deal and exit activity. The long-awaited returns could trigger a new positive cycle for this asset class. This scenario is further supported by falling interest rates, narrowing valuation gaps between sellers and buyers and the structural shift from public to private markets. We expect private market investments to perform well in 2026 and are therefore persisting with our strategy in this asset class.

Digital assets

The crypto markets have not yet been able to regain their bullish momentum. While ETF outflows have slowed and trading volumes remain above the typical level of past bear markets, even structurally positive developments, such as Vanguard’s openness to crypto investments or a US state introducing a strategic Bitcoin reserve, have not given rise to a lasting price effect. From a technical standpoint, the Bitcoin market remains balanced. In view of the typical year-end slowdown in trading activities, we are maintaining our cautious, neutral positioning.

TAA Plus Balanced CHF

Contact a client advisor for more information.

^{This publication is intended for information and marketing purposes only, and is not geared to the conclusion of a contract. It only contains the market and investment commentaries of Maerki Baumann & Co. AG and an assessment of selected financial instruments. Consequently, this publication does not constitute investment advice or a specific individual investment recommendation, and is not an offer for the purchase or sale of investment instruments. Maerki Baumann & Co. AG does not provide legal or tax advice. In addition, Maerki Baumann & Co. AG accepts no liability whatsoever for the content of this document; in particular, it does not accept any liability for losses of any kind, whether direct, indirect or incidental, which may be incurred as a result of using the information contained in this document and/or arising from the risks inherent in the financial markets. Maerki Baumann & Co. AG holds a Swiss banking license issued by the Financial Market Supervisory Authority (FINMA).}

Editorial deadline: 16 December 2025

Maerki Baumann & Co. AG
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