Nicolas Bickel

US equities should continue to gain momentum thanks to the supportive fiscal policy of the new administration, investment cycle in AI and the accommodative monetary policy. Nevertheless, selectivity remains the order of the day, with exposure to sectors that stand to benefit most from the Trump administration, such as selected consumer discretionary, industrials, healthcare and tech. The evolving geopolitical environment configuration will support the global security megatrend (Trump’s decision to increase spending on the military and the police, rising technology risks, rising environmental hazards, health security, security of supplies... the list goes on).

The current level of yields on investment-grade (IG) corporate bonds seems very attractive. The current attractiveness of the highest-rated investment-grade corporate bonds is based on three key factors, all of which are conducive to significant exposure to this bond segment: high yield levels, low risk of recession and accommodative monetary policy.

The current context should remain favourable to US equities since the country’s exceptionalist tendencies are likely to be reinforced by Trump and a higher public deficit should further support US corporations. EU companies face sluggish growth and threats of US import duties. We are particularly cautious on French stocks as we expect higher taxation for large French companies. 

On the other hand, we are positive on Swiss stocks, which are likely to be less penalised by tariffs and are likely to benefit from a weaker Swiss Franc, a call from our foreign exchange colleagues that is rather unconventional.

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