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Volatility is the new normal: Markets remain choppy, driven by trade shifts, AI skepticism, and crypto swings.
Equities favored: Overweight stance, with strongest opportunities in emerging markets and the eurozone thanks to attractive valuations and supportive policies.
Bonds under pressure: Corporate debt (investment grade & high yield) remains underweighted; preference for sovereign and emerging market bonds.
Inflation moderating: U.S. housing disinflation and stable consumer expectations ease price pressures; Europe and Switzerland face limited inflation risks.
Commodities & gold neutral: Oil oversupply and gold volatility temper enthusiasm, though long‑term safe‑haven demand persists.
Alternatives steady: Neutral stance on real estate, alternative funds, and cash.
November was anything but quiet for global markets. Trade breakthroughs, the end of the U.S. government shutdown, and growing skepticism around artificial intelligence all combined to create a volatile backdrop. Investors faced sharp swings in equities, cryptocurrencies, and commodities. Against this turbulence, Vontobel reaffirms its strategy: overweight equities, underweight bonds, and a cautious stance on alternatives.
Trade relations improve: The U.S. and China made notable concessions, reducing tariffs and boosting agricultural trade. Meanwhile, Switzerland agreed to invest heavily in the U.S. in exchange for lower tariffs, signaling a thaw in global trade tensions.
Shutdown ends: After 43 days, the U.S. government reopened, allowing economic data collection to resume. Markets welcomed the return of clarity.
AI concerns: Investor enthusiasm for artificial intelligence cooled, with fears of a bubble sparking volatility in tech stocks.
Crypto swings: Bitcoin’s dramatic price movements reminded investors of the risks in digital assets.
Regional economies:
China slowed sharply, with weak industrial output and retail sales.
Eurozone surprised positively, showing resilience and stable inflation at 2.1%.
Switzerland contracted in Q3, with inflation dipping to 0.1%.
Despite the noise, Vontobel remains optimistic about global growth. Two pillars support this view: accommodative monetary policy and pro‑growth political positioning, particularly in the U.S.
Federal Reserve: While policy remains restrictive, rate cuts are expected to continue into 2026.
Inflation trends: In the U.S., housing disinflation is easing price pressures, while consumer expectations are moderating. Europe and Switzerland face even fewer inflationary concerns.
Equities: Overweight, with a preference for emerging markets and the eurozone where valuations are attractive and stimulus measures supportive. Neutral on U.S., Swiss, and Japanese equities.
Bonds: Underweight corporate debt (investment grade and high yield). Favor sovereign and emerging market bonds.
Commodities & Gold: Neutral. Oil oversupply and gold’s short‑term volatility temper enthusiasm, though long‑term safe‑haven demand remains intact.
Alternatives & Cash: Neutral stance on real estate, alternative funds, and liquidity.
Volatility is no longer the exception; it’s the new normal. Yet opportunities remain. Emerging markets and the eurozone stand out as regions where valuations are compelling and policy support is strong. Bonds and alternatives require caution, but equities continue to offer the best potential for outperformance.
For investors, the message is clear: stay focused on fundamentals, embrace regional opportunities, and prepare for a world where turbulence is part of the landscape.
Knowledge is power.
