Explore the latest trends and strategic insights in the February 2025 edition of the “Market Compass.”
This issue offers an in-depth analysis of the shifting dynamics in the global financial markets, highlighting key developments from Silicon Valley to central bank policy changes and their broader market implications.
Highlights Include:
DeepSeek Shakes Up Silicon Valley: The Chinese AI start-up DeepSeek has made headlines with its new AI assistant, challenging the dominance of Silicon Valley tech giants. Developed at significantly lower costs, DeepSeek’s technology triggered a sell-off in the semiconductor sector, with Nvidia (-10.6%) and Broadcom (-4.6%) among the biggest underperformers in January.
ECB Cuts Rates, Fed Holds Steady: While the European Central Bank reduced its policy rate by 0.25% to support a slowing economy, the US Federal Reserve maintained its key rate at 4.50%. Fed Chairman Powell emphasized that strong economic activity and persistent inflation leave no urgency for monetary easing in the US.
Swiss Market Hits Record High: In contrast to the semiconductor sector’s struggles, the Swiss equity market surged to new highs in January, with the SPI index up 8.2%. Companies like Richemont (+28.4%), Logitech (+21.9%), and UBS (+16.6%) led the rally, attracting renewed interest from international investors.
Trump’s Tariffs Stir Market Volatility: US President Trump announced new import tariffs on major trading partners, including 25% tariffs on Mexico and Canada and 10% on China. This unexpected move raised concerns about a potential global trade conflict, contributing to heightened market volatility.
Market Outlook for 2025: Despite increased volatility, fundamentals remain supportive, particularly in the US, where Q4 2024 earnings growth is projected at 13.2%, the strongest since Q4 2021. We maintain a neutral stance on global equities and continue to favor high-quality fixed income and gold as strategic hedges in this uncertain environment.
Ready to dive in? Download the full PDF of our February 2025 Market Compass for a detailed analysis and forward-looking guidance on navigating today’s financial markets.
Do not hesitate to contact us with any questions about the topics discussed. We are happy to assist you with our expertise.
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