Situation Assessment & Outlook for the next six months
Our short-term assessment of the development of the financial markets and asset classes.
Review - 2024
In 2024, the global economy was characterised by uneven development among the major economies. After a slight economic downturn in the third quarter, growth figures in the US improved again towards the end of the year. In the emerging markets, led by China, economic performance remained below expectations due to disappointing stimulus measures. Europe recorded only weak economic growth due to a low fiscal stimulus and political uncertainties (new elections in France and Germany).
By contrast, the trend towards lower inflation rates continued worldwide. While inflation in the US is still above the central bank target, in Europe it has already approached the 2% p.a. mark. During 2024, central banks began lowering key interest rates and continued to do so until the end of the year. In total, the key interest rates fell in Switzerland by 1.25 percentage points and in the US and Europe by 1 percentage point in each case. As a result, short-term interest rates again aligned with long-term interest rates.
Equity markets performed well over the year, with some strong regional differences. As in the previous year, the US came out on top, followed by Europe and emerging markets. Thanks to a strong final quarter, the German stock market was able to extend its gains over the other European markets.
The price of gold rose significantly in the first nine months before entering a period of consolidation in Q4 2024. In the currency market, the US dollar ended the year with gains against the euro and the Swiss franc, while the franc weakened slightly against the euro.
Current situation assessment & outlook for the next six months
The global economic environment points to solid growth in line with the historical average in the first half of 2025, driven by positive developments in the US and emerging markets. Europe continues to lag economically but will avoid a recession.
Inflation rates remain at current levels of 0.5-1% p.a. (Switzerland), 2-2.5% p.a. (eurozone) and 2.5-3% p.a. (USA). Further interest rate cuts by central banks are expected. The long-term interest rate level (10 years) is moving sideways with regional differences (USA 4.3% p.a. and eurozone 2% p.a.). In Switzerland, we do not see a slide into a negative interest rate environment.
As a result of the second consecutive record year for equities in the US and Germany, the risk of a correction phase on the stock markets has increased. The exaggerated trend movement in both equity markets is seen as a warning indicator. On the other hand, the good profit growth of US companies and the expected interest rate cuts by the central banks support the attractiveness of equities.
In the case of the gold price, the consolidation that began in the fourth quarter of 2024 will continue in the coming months. No significant price movements are expected in the currency pairs EUR/USD, CHF/USD and EUR/CHF.
Disclaimer - legal notice
This publication was produced by the Investment Office of the Colin&Cie Group. The information and opinions contained in this document are based on sources we believe to be reliable. However, we cannot guarantee the reliability, completeness or correctness of these sources. All information and quoted rates are only up-to-date at the time of this publication and are subject to change at any time without notice. The content is based on numerous assumptions made by the Colin & Cie Group. It should be noted that different assumptions can lead to materially different results. The forecasts and assessments are only current at the time this publication is prepared and can change at any time without prior notice. Past performance of an investment is not a guarantee of future results. Certain investments can experience sudden and substantial losses in value. This information and views do not constitute a solicitation, offer or recommendation to buy or sell investment instruments or to carry out any other transactions. We recommend interested investors to consult their personal advisor before making decisions on the basis of this document so that personal investment goals, financial situation, individual needs and risk profile as well as further information can be duly taken into account as part of a comprehensive consultation. The information contained in this publication is marketing material that is distributed for advertising purposes only.
