The leading economic indicators painted a chiaroscuro picture in August. The US central bank (Fed) remained unmoved and stuck to its restrictive monetary policy. This combination triggered quite a rollercoaster ride for stock markets. Our basis scenario is still unchanged: we remain overweight in equities.

The leading economic indicators are painting both a light and dark picture. The US central bank (Fed) is sitting on its hands for now and has confirmed its existing pathway of restrictive monetary policy. This constellation is weighing on equities. US technology stocks are leading the global equities sell-off. Government bonds are appreciating strongly. Our basis scenario remains unchanged.

The first half of 2024 delivered solid returns for equity investors in particular. For bond investments, rising interest rates were a mixed blessing. US technology stocks continued to dominate global equity markets.

The attention of the investment community is gradually turning to the US elections. The first TV debate confirmed existing expectations of the quality of the candidates. Away from the cameras, rates of inflation continue to develop constructively. Both equities and bonds have benefited from this development. Swiss investors have experienced something of a headwind given the stronger Swiss franc.

For much of the year, 2023 was characterised by a volatile investment environment. It was another challenging year for investors. Rising interest rates had a conflicting impact on bond investments. US technology stocks dominated global equity markets.

The third quarter of 2023 was characterised by turbulence of varying kinds. Further rises in key interest rates weighed on bond investments and the likelihood of an economic downturn acted as a drag on equity prices, while at the start of October the terror attacks in Israel dragged geopolitics back to centre stage.

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.

The 2022 investment year was truly challenging for investors. Rising interest rates and falling equity prices dominated large parts of an extraordinarily difficult year. Developments around the world were shaped by high inflation – a knock-on effect from the pandemic, which was exacerbated further by the war in Ukraine.