Resilient markets in a global environment of heightened tensions

The global economy is proving robust, albeit with pronounced regional differences. In the US, strong private consumption and technology investments are supporting growth, while the labour market is cooling moderately. Europe is benefiting selectively from fiscal stimulus measures, and Switzerland from a stable domestic economy. At the same time, the geopolitical environment remains tense. Hopes for a calmer year in 2026 have already been tempered early on, although to date this has not had any noticeable negative impact on the financial markets.

The US economy has recently been well supported by private consumption, which has once again been underestimated by the market consensus. Private investment, particularly in the technology sector, has also been strong. By contrast, US employment growth has been less dynamic, which could be important for the government in the run-up to the congressional mid-term elections scheduled for November. In the Eurozone, the economies of southern member states are continuing to benefit from the so-called “NextGenerationEU” support programme. Following an extended period of stagnation, Germany is showing more positive economic signals, supported by leading indicators. The Swiss economy is currently characterised by stable domestic command, driven by the strength of the construction sector and private consumption.

Currencies

Following the pronounced correction of the US dollar last year, the greenback may now enter a phase of increased two-sided volatility. On the one hand, US equities, and indirectly the US dollar, appear almost over-represented in many global portfolios following their strong advances. On the other hand, however, economic growth in the US continues to outstrip that of other countries. The increasingly challenging financing of the sizeable US current account deficit could weigh on the US dollar. Conversely, the greenback would benefit if fewer interest rate cuts were to materialise during the course of 2026 than are currently expected by the market consensus. For the Swiss franc, the fact that Switzerland continues to have the lowest inflation of any OECD country remains a supportive factor.

Bonds

Yields on Swiss government bonds find themselves at a multi-year low. Key interest rates currently stand at zero and are expected to remain there. The European Central Bank is also likely to keep key interest rates unchanged for the foreseeable future. In the US, market participants have already priced in two further interest rate cuts for 2026. The potential for further declines in interest rates is correspondingly low and return prospects on the bond market remain subdued. Credit spreads are close to their historic lows. We are therefore maintaining our underweight position in bonds and our slightly longer to neutral duration positioning.

TAA Balanced CHF

Real estate

The Swiss real estate fund index (SWIIT) has once again hit a record high. Positive sentiment towards Swiss real estate investments persists, reflected by the many capital increases already announced for 2026. Low interest rates, high immigration and insufficient construction activity remain the fundamental drivers of this trend. Demand for indirect real estate investments is likely to remain robust. Swiss real estate funds continue to look more attractive than bonds and less volatile than equities. As such, we are maintaining our overweight position.

Equities

The equity markets continue to largely disregard geopolitical tensions. As a result, both Swiss and global equities have performed positively so far this year, as measured by the SPI and the MSCI All Country World Index, respectively. As usual, major US banks were among the first to present their annual results. Thanks to strong trading, investment banking and a revitalised lending environment, they reported record revenues and profits. Despite these robust results, certain figures and outlooks fell short of expectations, triggering short-term price declines on the markets. We are maintaining a neutral equity allocation, while making adjustments within this segment. Specifically, we are reducing our exposure to value stocks by half and investing the proceeds in global industrial equities. Value stocks have performed positively over the past 12 months and generated added value. This transaction allows us to realise some of the profits. The industrial sector is currently benefiting from several long-term investment trends: reindustrialisation, automation and extensive infrastructure and defence spending programmes are driving structurally rising demand for investment.

Commodities

The new year began much as the previous one ended: precious metals posted strong gains and are already almost 10% up on the levels seen at the end of December. Industrial metals have also risen considerably, with gains of around 6%. By contrast, the agricultural sector declined slightly, with cocoa, in particular, recording sharp losses. The energy sector put in a modestly positive performance, though it experienced higher-than-usual volatility in light of developments in Venezuela and Iran. Our neutral weighting to commodities overall remains unchanged. Gold was not quite able to keep pace with other precious metals, but still also posted a very successful return of in excess of 14%. Despite the currently somewhat overbought market situation, an overweight in gold remains justifiable.

Private markets

Although private markets faced headwinds during 2025, the asset class demonstrated resilience and even recovered slightly towards the end of the year. Geopolitical and macroeconomic uncertainties will continue to pose a challenge going forwards. Nevertheless, a sustained improvement in transaction activity is expected. Market sentiment with respect to the year ahead remains cautiously positive and points towards a continuous recovery. With our private market strategy, we are currently well positioned and will continue to maintain broad diversification.

Digital assets

The new year rally on the crypto markets has already lost momentum, as Bitcoin failed to break through key resistance levels. It is striking that crypto as an asset class primarily reacts with selling pressure in the face of negative geopolitical news, while showing little price appreciation in response to positive developments. On the supply side, a significant supply overhang persists. On the demand side, Bitcoin ETF outflows and inflows are currently broadly balanced. The only notable exception is the key Bitcoin purchaser Strategy, which appears to be in a position once more to raise additional capital for Bitcoin acquisitions. From a demand perspective, however, there is still no sign of a trend reversal. We are maintaining our neutral positioning.

TAA Plus Balanced CHF

Contact a client advisor for more information.

^{This publication is intended for information and marketing purposes only, and is not geared to the conclusion of a contract. It only contains the market and investment commentaries of Maerki Baumann & Co. AG and an assessment of selected financial instruments. Consequently, this publication does not constitute investment advice or a specific individual investment recommendation, and is not an offer for the purchase or sale of investment instruments. Maerki Baumann & Co. AG does not provide legal or tax advice. In addition, Maerki Baumann & Co. AG accepts no liability whatsoever for the content of this document; in particular, it does not accept any liability for losses of any kind, whether direct, indirect or incidental, which may be incurred as a result of using the information contained in this document and/or arising from the risks inherent in the financial markets. Maerki Baumann & Co. AG holds a Swiss banking license issued by the Financial Market Supervisory Authority (FINMA).}

Editorial deadline: 23 January 2025

Maerki Baumann & Co. AG
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T +41 44 286 25 25, info@maerki-baumann.ch
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