Despite the risk of impeachment, the trade war and other disputes, 70 percent of Swiss asset managers expect U.S. President Donald Trump to be re-elected, and expectations for the stock market are correspondingly positive.
The opinions are obviously made: A good 70 percent of Swiss asset managers expect US President Donald Trump to be re-elected next year. In contrast, only 20 percent of respondents expect the Democratic Party to win (see chart).
This is according to the latest Aquila Asset Managers Index (AVI), published by the Swiss Aquila Group every three months in cooperation with finews.ch published. The index summarizes various forecasts from independent asset managers in Switzerland. Almost 160 firms took part in the latest survey.
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Another four-year term for Donald Trump is likely to have a positive effect on the stock market. At least, that is the assumption of the survey participants. They expect interest rates in the USA to fall further, which in turn would have an impact on interest rates in the euro zone and Switzerland.
Against this backdrop, it comes as no surprise that Swiss asset managers expect stock market prices to rise significantly over the next three months (53 percent of respondents in the SMI, 43 percent in the EuroStoxx50 and 47 percent in the S&P500) (cf. graphic).
The positive expectations generally make asset managers optimistic. A total of 44 percent of survey participants expect business to develop positively or even very positively over the next twelve months; 43 percent anticipate stable development. And based on these premises, one third of the asset managers surveyed intend to hire additional staff, as the current survey further reveals (cf. graphic).
A look back also shows that the first nine months of 2019 have left a positive mark on the books of independent asset managers. Rising prices between January and the end of September not only led to an increase in assets under management for 57 percent of respondents, but also to a significant increase in new money for 31 percent of survey participants. Good market performance was also important to growth for 37 percent of asset managers (cf. graphic).
In three months, Swiss asset managers see the SMI at an average of 10,017 (in the previous quarter: 9,693), gold at a price of just over 1,538 (in the previous quarter: 1,392) dollars an ounce and the euro at 1.08 (in the previous quarter: 1.11) francs.
The next AVI Index will be published in January 2020
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In the latest Aquila Focus, Nicolas Peter, Head of Banking & Investments, discusses the continuing rally in US tech stocks and the lack of an interest rate cut in the USA for the time being.
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In 2023, numerous geopolitical risks came to the fore, supplemented by interest rate hikes by central banks in the fight against inflation. The conflict in Ukraine will soon last two years. In addition, the situation in the Middle East has worsened, particularly between Israel and Hamas. An escalation of the conflict to neighboring Arab countries has been prevented so far. Economic weaknesses are also evident in two of Switzerland's key trading partners: China and Germany. These developments are leading to a lack of important impetus from foreign trade. Geopolitical issues will continue to play an important role in the coming year. However, the past has shown that the impact of such events on the global financial markets is often short-lived.
Fewer sustainability investments, but more investments in pharmaceutical companies and the healthcare sector. Artificial intelligence en masse, but shares instead of gold. These are some of the resolutions of independent asset managers in Switzerland for the first quarter of 2024, according to the latest AVI Index.
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