Our latest insights on the markets.
December – 2024 was a great vintage…and now we wait
The year started strong, with running months of strong positive performance, justified by good Q4 2023 corporate results and inflation which seemed to come under control. In fact, by the end of Q1 2024, you could have sold all your equity portfolio and locked in the performance of the annualized long-term return on the equity markets.
November – Markets love the color red
By now, it is old news that Trump won the race and will have quasi-unchallenged powers. Indeed, besides the presidency, which he won with a greater margin than back in 2016, Republicans took over the Senate and the House in a so called “red sweep”, showing once again the limits of polls when it comes to predicting outcomes of very polarized elections.
October – Might as well skip to November
By now, we are all tired about the non-stop coverage and exposure to the US election. Admittedly, it is an important event as it will give a sense of direction to certain sectors depending on who wins the White House. And with the US representing over 72% of the developed World Index (and over 65% even if emerging markets are included), this will ripple around the world.
September – A central bank story
The headline was set and the main theme of this monthly letter was pretty much all written and ready for print. And then China acted, and not with superficial measures like last year. This time China took the economic problems (deflation, below target growth, real estate slump, to name the main ones) it is facing very seriously (see below for more).
August – “It is time”
More fear than harm in August, as we witnessed one of the most dramatic sell off in stocks in years, with the S&P 500 losing over 7% over 2 trading days. All major indices took a hit due to a combination of factors. It all started with weak job and manufacturing data, and fear that the Fed may have delayed cutting rates for too long and the resulting increased probability of a recession. Meanwhile, the bank of Japan took everyone by surprise by increasing interest rates, leading to the unwinding of yen carry trade (borrow yen at a low interest rate, buy USD, invest the USD in bonds or stocks), thereby taking the volatility index (VIX) to a 4-year high.