Slow food for thought

Insights and research on global events shaping the markets

Thanks to numerous strategic partnerships and visionary local players, Ticino's largest city is establishing itself as a European cryptocurrency and blockchain capital.

Key takeaways • There has been a change of tone in the markets with equities pulling back in April and US 10-year yield moving up 45 basis points over the month, while gold and the dollar soared. • The weight of evidence of our fundamental and market dynamics indicators leads us to remain neutral to positive on equities. While markets could stay choppy for a little while, we believe that the pullback could be contained, and that further equity market weakness is buyable. • Going forward, we want to keep our allocation to Equities close to our strategic asset allocation (SAA) neutral weights. We upgraded our stance on European stocks (from neutral to positive) and downgraded our view on Japanese stocks from positive to neutral. We remain negative in fixed income and downgraded our view on Emerging markets bonds. We have also upgraded our stance on Commodities to positive from neutral. Last but not least, we reduced all currencies by one “notch” vs. USD: EUR, CHF, GBP & EM are reduced down to negative (from neutral) while JPY is down to neutral (from positive).

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Insights and research on global events shaping the markets

The Dow Jones Industrial Average, S&P 500 Index, and Nasdaq Composite climbed to record highs during the week, with the Dow crossing the 40k threshold for the first time ever. As inflation and interest rate worries appeared to dissipate, growth stocks outperformed. The major factor supporting sentiment appeared to be Wednesday’s release of the US Labor Department’s April consumer price index (CPI), which came in at or modestly below expectations, in contrast to hotter-than-expected prints over the preceding three months. Thursday’s US retail sales figure was another boost for stocks as bad macro news seemed to be good news for the market (retail sales were flat in April versus consensus estimates of a 0.4% gain).

Rising share buybacks, led by Apple, expected to sustain US stock market rally. US household savings have shrunk considerably just as the US labour market is starting to deteriorate. Each week, the Syz investment team takes you through the last seven days in seven charts.

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