24th January 2017
Jean-Louis Richard, Senior Financial Analyst
After a summer to be qualified as “calm”, the year-end showed itself as turbulent. With rising numbers in the polls for Donald Trump, followed by his victory at the elections in the US, we saw falling stock prices, followed by a strong rebound as of November. His program of budgetary impulse should on one side support activity and on the other side increase public deficit. This should push rates upwards.
These perspectives were finally considered as positive for stocks, especially for financials and cyclicals. The Swiss stock market, composed of more defensive than cyclical companies, underperformed other large markets. The SPI, the large index of the Swiss stock exchange, gained +0.9% during the quarter. Over the year 2016, the Swiss stocks remained in red territory and lost -1.4%.
The perspective of higher interest rates weighted naturally on the bonds. In Switzerland their reference index lost -3.2% during the fourth quarter. Over the full year the index shows a small but positive result of +0.2%.