Will 2022 be as strong as last year for the Swiss equity market? Which market segments and sectors should be favored?

This week, software giant Microsoft announced a deal to acquire the American video game publisher Activision Blizzard in an all-cash transaction valued at $68.7 billion ($95/share). What are the strategic reasons behind this gaming mega deal?

Instability in EMs means sovereign bonds are subject to pain in the short term.

Over the past decade, European equities have substantially underperformed US indices. What are the reasons behind this trend? Should we expect a reversal?

Markets started 2022 with a bit of a bang for investors. Equities and bonds fell in tandem on the back of Fed minutes which turned out to be more hawkish than expected, leading to US 10-year bond yields to break critical levels. Despite a potentially less supportive liquidity outlook in the months ahead, current signals lead us to maintain a positive stance on risk assets and equity in particular. Global growth remains above potential, financial conditions remain supportive, global earnings growth remains well oriented and some segments of the market remain reasonably valued. Last but not least, our market technical indicators (trend, sentiment, etc.) continue to be positively oriented.

Central banks have injected trillions of dollars of liquidity. To the point of creating an increasingly large valuation premium on assets with limited supply. 

2021 was another good year for global markets as strong global growth, negative real bond yields and positive earnings revision pushed more investors into risky assets. Below, we discuss in more detail what we identified as the 10 most significant financial market stories of 2021.

While many investors were expecting a year- end rally, equity volatility is on the rise as markets need to digest central bank tightening and fears over the impact of the Covid-19 omicron variant - among others. Should we interpret recent equity market weakness as a sign that the bull market is running out of steam or should we rather look at it as a healthy correction?

On Wednesday, the Federal Reserve provided multiple indications that its run of ultra-easy policy since the beginning of the Covid-19 pandemic is coming to a close, speeding the tapering of their monthly asset purchases program and signaling three rate hikes next year, in response to rising inflation. Yet the markets reacted very positively. How to explain this “melt-up”? Will it last and does the Fed’s “hawkish pivot” have any implications for our market outlook?

While many economists have tried to compare the current macroeconomic landscape to that of the roaring 20s (optimistic scenario) or the 70s (pessimistic scenario), the context of the 40s is also rich in lessons.