Stock Markets in a Coffee Break from Europe

The financial markets took a momentary pause this week, largely influenced by concerns over potential trade wars and the persistent geopolitical uncertainties in Ukraine. This brief respite comes after a period of steady growth, indicating a moment of reflection and caution among investors. Despite this temporary halt, the broader upward momentum that has characterized the markets since the beginning of the year remains robust, suggesting that the fundamentals driving market growth are still firmly in place. As we look ahead, investors are advised to brace for potential volatility, with several significant events on the horizon. This Sunday, Germany will hold legislative elections, the outcomes of which could have far-reaching implications for European politics and economics. Investors will be closely monitoring the results for any indications of policy shifts that could impact the markets. Next Friday will see the release of crucial inflation data for France, Germany, and ...

  Global financial markets are surging with optimism as major indices like the S&P 500, Nasdaq-100, and EURO STOXX 50, comprising 50 blue-chip companies from 11 Eurozone countries, reach record highs. Over the past few days, bond yields have seen a modest increase, with yields rising by 4 to 6 basis points. Despite this uptick, stock markets remain buoyant, bolstered by hopes of a resolution in Ukraine, which could alleviate geopolitical risks and reduce the associated risk premium.   The technology sector, particularly semiconductors, has shown strong performance with four consecutive sessions of gains. Although not at an all-time high, this resurgence is crucial for the overall market's long-term growth. Intel's recent 16% surge, driven by the potential split into two entities, has further bolstered the tech sector's recovery. This momentum is particularly important as the technology sector often sets the pace for broader market advances. Inflation in th...

Photo by Aad Brinkman The Eurozone's economic performance in 2024 has been marked by a blend of moderate growth and fluctuating momentum, reflecting the complex interplay of various economic factors. In the fourth quarter of 2024, the Eurozone's GDP grew by 0.9% year-on-year (YoY), maintaining the same growth rate as the previous quarter. However, the quarter-on-quarter growth was revised down to 0.1%, a notable decrease from the 0.4% growth observed in the preceding quarter. This downward revision suggests that while the Eurozone economy is expanding, the pace of growth is slowing, indicating potential underlying weaknesses. For the full year of 2024, the Eurozone's GDP grew by 0.7% YoY, a modest improvement from the 0.4% growth recorded in 2023. This growth reflects the economy's resilience in the face of numerous headwinds, including geopolitical tensions, supply chain disruptions, and the lingering effects of the COVID-19 pandemic. However, the decelerat...

Executive Summary The February 2025 Multi-Asset Barometer report highlights a cautious outlook for global financial markets, emphasizing the need for strategic asset allocation and vigilance amidst increasing economic risks. This report provides an in-depth analysis of global economic risks, market resilience, emerging market opportunities, sector performance, fixed income and currency outlooks, and the role of gold as a hedge against volatility. 1. Global Economic Risks - Risk Assessment: The global economy faces increasing risks, prompting a downgrade of equities to a neutral position and an upgrade of cash. - Key Concerns: Newly imposed trade tariffs, stretched equity valuations, and potential economic slowdowns are major concerns. - Investor Guidance: Recent market turbulence underscores the transient nature of market rallies, necessitating investor vigilance. 2. US Market Resilience - Market Outlook: The US market is expected to outperform others due to strong corporate earnings a...

This week, the focus will be on US inflation data and Federal Reserve Chair Jerome Powell's statements, but the most significant event will occur over the weekend: the Munich Security Conference, which will address geostrategic risk premiums. The corporate earnings season remains active and continues to support stock markets, as the aggregate figures are positive. With approximately three-fifths of listed American companies having reported, the average EPS stands at +13.3%, nearly double the expected +7.5%. This strong performance has once again provided reliable support for the stock markets for another quarter. Historically, stock markets align with corporate results over the long term. This week, the market's direction will largely depend on the US inflation data, scheduled for release on Wednesday at noon, and Powell's testimony before the Senate and Congress on Tuesday and Wednesday, respectively. Inflation is expected to remain steady at +2.9%, while the underlying ra...

In recent weeks, global stock markets have exhibited a tendency to rebound rather than retreat, driven by a confluence of factors that have bolstered investor confidence. This resilience is underpinned by several key developments in trade relations, geopolitical stability, and corporate performance. Trade Risk Reduction One of the most significant contributors to the market's positive trajectory is the reduction in trade war risks. The introduction of a 30-day grace period to negotiate tariffs with Mexico and Canada has eased tensions, providing a window for diplomatic resolution. This de-escalation has mitigated uncertainty, allowing markets to focus on fundamentals rather than geopolitical risks. Strategic Situation Geopolitical risks have also shown signs of abatement in key regions. The conflict in Israel appears to have temporarily subsided, reducing strategic risk in the Middle East. Meanwhile, the situation in Ukraine remains stable, although the upcoming peace conference in...