Horizon Handout December 2024

Economics

• European Central Bank with small interest rate cut in December.
• Donald Trump is back and threatening tariffs.
• The Bank of England is hampered by price pressures in the services sector.

Equities

• Trump's US election victory sparks US equity rally. Trade war concerns weigh on European and Asian equities.
• Q3 earnings growth of Stoxx 600 companies at +5%, while sales growth weakens year-on-year.
• We remain optimistic for the year-end. Positive year-end seasonality likely, especially in the US.

Bonds

• Strong US economy and Trump re-election support US yields. Europe faces political and fiscal uncertainties.
• Weaker eurozone activity and the prospect of US tariffs are weighing on corporate bonds.
• Given the increased interest rate volatility, we are keeping duration at a neutral level across bonds.

Alternative investments / commodities

• The supply of crude oil remains abundant, but a massive increase in US production under Trump is unlikely.
• Despite a temporary setback, gold remains supported by fundamental factors.
• In the short term, industrial metals need an economic recovery in the industrial sector. Medium-term drivers remain intact.

Currencies

• In the short and medium term, there is a lot going on in favour of the US dollar.
• Weak economic data and the war in Ukraine weigh on the euro.
• The strong franc is a cause for concern for the Swiss National Bank.