Europe in the fast lane.

Our view on the markets and investment strategy in the March 2025 Market Compass.

Highlights Include

Germany’s Election Shakes Up Markets: The CDU/CSU emerged victorious in Germany’s parliamentary elections, securing around 28.5% of the vote. While investor optimism lifted the DAX by +3.8%, the new coalition will face challenges in implementing structural reforms amid an ongoing recession (-0.2% GDP growth in 2024).

Earnings Season: Good, But Not Enough

The Q4 2024 earnings season is wrapping up, and while corporate fundamentals remain strong, investors reacted harshly. Tech giants like Alphabet (-16.5%), Amazon (-10.7%), and Microsoft (-4.4%) faced significant declines, shifting market sentiment in favor of European (EuroStoxx 50 +11.6% YTD) and Chinese (Hang Seng +14.4% YTD) equities.

Trump’s Aggressive Trade Moves

The Biden administration’s cautious stance has given way to Trump’s aggressive policies. While initial tariff hikes on Mexico and Canada were delayed, new threats of 25% tariffs remain on the table. The US administration is also taking an increasingly active role in mediating the Ukraine-Russia conflict, adding to geopolitical uncertainty.

Dividends Matter More Than You Think

Over the long term, dividends contribute significantly to total stock market returns. Studies show that dividends have accounted for about one-third of US stock market gains since 1926, with an even greater impact in markets like Switzerland.

Market Outlook for 2025

While Europe and China show signs of recovery, US market sentiment remains cautious. We maintain a neutral stance on global equities, emphasizing high-quality bonds and well-diversified portfolios to navigate increasing volatility.

Ready to dive in? Download the full PDF of our March2025 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.