Positive indicators
Although GDP growth has slowed, macroeconomic indicators are higher than in other regions, and it seems unlikely that Switzerland will enter a recession in the next twelve months. On top of that, other data, such as corporate earnings, keep coming in better than expected. Inflation is also well below the levels seen elsewhere in Europe and in the States.
The current uncertainties in Switzerland's favour
The lack of visibility makes the Swiss market all the more attractive – Swiss equities proved more resilient than others in the first half of the year and will continue to hold up well until global uncertainty and recessionary fears subside. However, if investors start wanting to take on more risk, which seems to have been the case in recent weeks, Swiss equities – particularly large caps – may struggle.
Given the high level of uncertainty, especially in Europe, we remain constructive on the Swiss market. We also recommend turning back to small caps, which have been largely overlooked since the beginning of the year and whose valuations are once again becoming attractive.
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Author
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Daniel Steck has nearly 25 years of experience in finance. After a first experience in financial analysis at Lombard Odier, particularly in the health sector, he continued his career at Reyl & Cie, as an analyst and portfolio manager. He joined Piguet Galland in 2018 as a senior manager and is responsible for the management of various thematic certificates and equity funds in Switzerland and North America.
