Despite uncertainty about the new Trump administration’s emerging policies and the potential response from the Fed, equity markets got off to a positive start this year. The MSCI global equity index climbed 3.3% measured in US dollars. Industrialised nations outperformed emerging markets. Remarkably, at an upturn of 6.3% the European STOXX 600 beat the US S&P500 (+2.7%) by a substantial margin. Following the sharp movements in bond yields in December, it was calmer on the government bond market in January. Overall, US yields declined by a few basis points, while their German counterparts were up slightly. Spreads on investment grade and high yield credits tightened somewhat on balance. Real estate succeeded in recovering somewhat after the downturns caused by bond yields in December.
You can download February's new view on asset allocation below. This month's focus is on the following:
- Equity markets plagued by AI and import tariffs
- US economy charges ahead, Eurozone stagnates
- Partial profit-taking on equity overweight