US stock markets should benefit from tax cuts and deregulation. On the other hand, a harsher wind will blow on other markets due to the planned import taxes.
US Stocks Rise: After the surprisingly clear election victory of Donald Trump and the Republicans in Congress, we increased the share of US stocks on November 6 as part of our investment tactic. American stock markets should benefit from tax cuts and deregulation. On the other hand, a harsher wind will blow on other markets due to the planned import taxes. Learn more in the “Close-up” section of this edition.
Divergent economic dynamics: economically, the gap between Europe and the United States continues to widen. The latest purchasing managers’ indices (PMI) for the month of November have weakened significantly in the euro zone. With a value of 48.1 points, the composite PMI index, which includes both industry and services, once again falls below the 50 point mark and thus enters the recessionary zone. In the United States, on the other hand, it rose to 55.3 points, still signaling an expansion of the economy.
Inflation in the crosshairs: the latest inflation rates are trending upward. Both in the United States and in Europe, inflation started to rise again in October. This development poses challenges for central banks. While the ECB should nevertheless continue to lower its key rates in December due to the weak economy, the Fed should mark time.
Seasonal wind in its sails: Typically, December is the start of the strongest seasonal stock market phase. However, due to the already very positive performance of stocks, the classic end-of-year rally should be rather moderate this year.
Large diversification: we always recommend diversifying well and focusing on quality. We are currently overweight Swiss equities, real estate funds and gold to the detriment of European and emerging market equities as well as high yield bonds.
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