Equity markets consolidated over the summer months. The prospect of an economic downturn gave rise to uncertainty. Capital market interest rates barely declined, despite perceptible concerns over the development of the economy and lower rates of inflation. In the US, interest rates actually rose significantly. This environment opens up investment opportunities.

US technology stocks have soared in recent weeks. By contrast, equity markets as a whole have trended sideways. The focus now is on the increasingly pronounced economic downturn and its impact on companies. Inflation rates are still too high, central banks remain hawkish.

Our essentially positive expectations with regard to the first six months of 2023 were borne out. Mixed investment portfolios clawed back some of the losses of the previous year, with investors favouring equities, primarily European and US technology stocks.

The consequences of the rapid rise in interest rates have become all too apparent over the last few weeks. In Switzerland, turbulence in the banking sector triggered the downfall of Credit Suisse. Measures taken by central banks and government brought the situation under control, and the storm abated. The economic slowdown continues to gather pace, but companies are performing well. Time to adjust the compass.

UBS is acquiring Credit Suisse (CS) by means of a share swap. This takeover was made possible by the combined support of the Swiss government, the Swiss Financial Market Supervisory Authority (FINMA) and the Swiss National Bank (SNB). The financial markets have swallowed this sedative pill for now, but are likely to remain jittery over the coming weeks. Investors should nonetheless keep calm and remain invested.

Optimism proved the dominant emotion in the markets during the first few weeks of the 2023 investment year. The threats posed by inflation and risks of a recession disappeared almost entirely from the perception of investors. But a considerable amount of the ground gained was then conceded in February.