Market Comment

Market Comment

The Market Comment is published monthly and sheds light on current topics from the investor's point of view.

Market Comment

Peak or turning point?

As the fourth quarter gets under way, are we at the turning point for both the economy and the markets? Have we already passed the peak in terms of the economy? The question of quite where we are in the economic cycle will by definition only be possible with hindsight.

Market Comment

The changing face of China

China has changed. Whereas in 2020 the country was still clearly an engine driving economic activity and attracting investors, it has now become a negative factor for the stock markets. What lies behind this?

Market Comment

Profitability and productivity

An important question for equity markets right now is how corporate profit margins will develop going forward. There is a fair amount of uncertainty surrounding this issue, particularly given a backdrop of rising inflation.

Market Comment

How is the Swiss economy doing?

This year, Switzerland – much like other countries – has staged a noticeable economic recovery. But while countries such as the United States owe this mainly to government cash hand-outs, the Swiss economy is managing to recover under its own steam. As a result, the country’s government debt remains moderate, even by international standards. In addition, Switzerland still has lower inflation than other countries. Swiss equities remain attractive.

Market Comment

“4 minutes with CIO Gérard Piasko”

In our new CIO video, Gérard Piasko highlights the situation of European equities: What arguments speak in favour of EU equities? What is lending them support? Where do risks lie? And how are the economy and valuations in the eurozone?

Market Comment

The problem with MMT

Once again in 2021, the popularity of a pragmatic, expansionary monetary policy that provides ongoing stimulus to the economy in all global regions appears to be enduring. This approach to monetary policy can be described as one way of applying so-called “Modern Monetary Theory (MMT)”. Particularly in the US, but also in Europe, the financial markets have so far responded positively to the ballooning of central bank balance sheets. 2022 and 2023 are likely to be the real test for advocates of MMT. Trust in paper currencies could be put to the test.

Market Comment

“3 minutes with CIO Gérard Piasko”

Inflation is currently the big talking-point in the financial markets. What concerns does this give rise to in the short or long term. Where is the inflationary trend coming from? What effects are the higher commodity prices having on consumer prices? How important are the current supply bottlenecks, such as for semiconductors? What implications does inflation have for investors? Our Chief Investment Officer, Gérard Piasko, will provide some conclusive answers to these questions.

Market Comment

Easy come, easy go?

The week of 17 May 2021 brought a dramatic sell-off for most of the cryptocurrencies. Almost no coin or token escaped with losses of less than 30%. What lies behind this severe slump? Does it signify an end to the recent rally? And what does this mean for (potential) investors? We explore all of these questions.

Market Comment

The inflation debate – an update

In last year’s Market Comment “Underestimated inflation debate?”, we pointed out that inflation could potentially be underestimated. In the aftermath of that publication, we adopted an underweight position in bonds relative to equities. In the following article we now provide an update on the inflation debate. The key takeaway is that – for all the uncertainty over the long-term trend – inflation is primarily a cyclical phenomenon. This suggests it would be wise to maintain an underweight fixed-income position.

Market Comment

Value or growth?

A frequently heard discussion in the investor community is the question of “value” or “growth”. In other words, should investors opt for equities with historically low valuations or historically above-average business growth? In this debate between value and growth, balanced consideration of various aspects with an emphasis on robust companies looks like the sensible medium-term strategy.

Market Comment

Consequence of coronavirus: a strengthening of structural trends

The coronavirus crisis is changing our habits and activities. It is accelerating a number of trends that were already evident before the pandemic began. In many cases, these trends are “disruptive”, i.e. they are structurally changing the economy as well as a number of industry sectors and markets at certain breakpoints. We have identified “7 corona trends” that are increasingly affecting our economic environment and seem unlikely to disappear even after a return to “normality”.

Market Comment

Currency market dilemma?

With his economic stimulus plans, the new US President has paused the international currency trends that had been evident for some months. At the same time, America has been calling Switzerland a “currency manipulator”. This will hardly present much of a dilemma for the Swiss National Bank (SNB), which can be expected to make further interventions in the currency markets – if it considers these to be necessary. By contrast, the spread of the coronavirus and the US President’s plans raise questions about the dollar’s future trend.

Market Comment

“3 minutes with CIO Gérard Piasko”

Investment year 2021 has just started. Maybe you are wondering how you should be preparing for it? Will the economy develop positively in the key regions of Europe and the USA? Can we look forward to a recovery? What will the central banks’ stimulus measures look like? In a three-minute online discussion (available in German only), our Chief Investment Officer, Gérard Piasko, will provide some conclusive answers to these questions.

Market Comment

Economic recovery in 2021 – will it be as strong as expected?

2020 was a difficult but above all volatile year. We must assume that the coronavirus pandemic and the attempts to combat it with vaccines will remain the most important – and indeed an unpredictable – factor for the global economy. It is vital that central banks and governments continue to provide monetary and fiscal stimulus. The low comparative base for corporate earnings in a poor 2020 should enable 2021 to record high year-on-year growth. But pre-pandemic levels of global economic output and corporate earnings will hardly be easy to achieve this year.

Market Comment

Major change in geopolitics?

US President-elect Joseph (“Joe”) Biden has sparked hopes of a change in geopolitical relations. But while we can expect to see a change in style, there is less hope of a change in the substance of America’s relationships with China and Russia. Put simply, there is too much at stake for the US in its rivalry with these two superpowers, which have both become more aggressive. As we are expecting America to show a more cooperative attitude to Europe, however, sentiment towards European equities looks set to improve.

Market Comment

“4 minutes with Gérard and Kostas”

What effect will the result of the US presidential election have on the financial markets? Our CIO, Gérard Piasko, provided answers on Monday afternoon, 9 November 2020. Additionally, our Head of Investment Management, Konstantinos Ntefeloudis, comments on our “Defensive Growth” investment approach in our new video.

Market Comment

Invest with “Global Impact” – to achieve precisely that

It would be no surprise if the US were now to experience – as we have already witnessed in Europe – an increase in institutional capital flows into investments that take into account “ESG” (environment, social and governance) criteria. At our bank, a sustainable investment approach can also incorporate forward-looking “megatrends”. By investing in a “Global Impact” module, investors can design their investment portfolios in a way that is more sustainable in the wider sense of the word. This module represents a suitable and innovative addition to an existing investment portfolio.

Market Comment

US election volatility

One of the most momentous political events is approaching: the United States of America is about to elect its next President and a new House of Representatives, along with part of the Senate. The Democratic candidate, former Vice President Joe Biden, is heading into this electoral battle with an agenda that tends towards the social democratic/green end of the spectrum, whereas Donald Trump is campaigning on the basis of conservative positions such as less regulation and tax cuts. True, electoral promises often fall by the wayside after the election itself, but the different plans of the two candidates are still relevant. From the investor’s perspective, in the event of no clarity emerging over the actual winner, US equities could remain volatile for weeks, while economic activity could be influenced by uncertainty.

Market Comment

Underestimated inflation debate?

Over the course of time, the market focuses on various themes, depending on what is making the headlines at any particular time. One market theme that has recently receded into the background somewhat is inflation. Part of our investment strategy approach involves analysing themes that are not the current focus of attention, as these may be underestimated. One issue that could become more prominent over the next few months is the debate over inflation, particularly in the event of economic data improving. In such a scenario, the emphasis could shift from sovereign bonds more to their corporate counterparts.

Market Comment

“3 minutes with CIO Gérard Piasko”

In the meantime, all the major financial markets have risen. How should you position yourself with bonds, currencies and equities now? Our Chief Investment Officer explains the reasons in the new video “3 minutes with CIO Gérard Piasko”. (only available in German)

Market Comment

The consequences of financial repression

The flood of monetary liquidity, which has assumed gargantuan dimensions over the last few months, is designed to support both the global economy and financial markets. However, the level of fiscal support for the economy, the increase in government indebtedness and the bond purchase programmes of central banks amount to a monetization of government debt and what is known as “financial repression”. 

Market Comment

Eurozone equities – an appropriate addition to a portfolio

Following a prolonged period in which the Federal Reserve (Fed) provided the greatest degree of economic stimulus of any of the world’s key central banks and the European Central Bank (ECB) adopted a less expansionary stance, the latter has now ratcheted things up dramatically since June. The announced increase in the injection of liquidity from EUR 750 bn to EUR 1,350 bn will provide the Eurozone with emphatic economic and market support. 

Market Comment

Swiss equities have appeal

The global economy may be having a tough year, but equity markets have calmed and are trending upwards. The dramatic further opening of the monetary floodgates by central banks and governments is creating a wave of liquidity that can flow into the real economy and/or the financial markets. Both of these things are likely to happen. Swiss equities and the Swiss franc have always been a byword for stability and historically attractive growth.

Market Comment

“3 minutes with CIO Gérard Piasko”

The financial markets have clawed back: monetary and fiscal support packages have been rolled out. Where equities are concerned, Swiss shares are currently interesting. Our Chief Investment Officer explains the reasons in the new video “3 minutes with CIO Gérard Piasko”. (only available in German)

top