By Silvano Grimaldi, CEO of the independent asset management firm Grimaldi & Partners AG.
Monthly Review
International equity markets ended May 2025 with gains.
Expectations of Interest-Rate Cuts by the Fed and ECB
In the United States, weaker economic data led investors to speculate that the Federal Reserve could implement at least one interest-rate cut towards the end of the summer. According to futures markets, a rate cut was almost fully priced in by September.
In Europe, the ECB continued its easing cycle with its eighth interest-rate cut in just over a year, lowering its key interest rate to 2%. This increased investors’ willingness to take risks.
Easing Fears of Global Trade Wars
Markets became increasingly optimistic following temporary delays and signs of easing in relation to US tariffs, including provisional suspensions and renewed negotiations.
The positive outlook for discussions between Donald Trump and Xi Jinping reduced tensions and strengthened investor confidence.
Recovery in Technology and Growth Stocks
A strong technology rally generated substantial market gains in the United States. The Nasdaq and S&P 500 recovered a significant portion of the losses recorded in April.
Companies such as Nvidia and Broadcom strengthened investor sentiment and generated additional momentum, including in European markets.
Positive Economic Signal from Germany
Despite subdued economic expectations, German industrial orders surprised positively.
This development supported the ECB’s strategy and provided additional momentum for European equities.
Fiscal Stimulus and Corporate News
Germany announced a new tax-relief package intended to support domestic consumption and investment.
Solid corporate reports from pharmaceutical companies such as Roche, GSK and Novo Nordisk, together with transactions in the energy sector, also encouraged targeted sector rotation.
Stock in Focus
Sandoz Delivers Solid Quarterly Results and Confirms a Positive Full-Year Outlook
Sandoz’s quarterly figures showed a positive development in the company’s performance during 2024.
In the first quarter of 2024, Sandoz generated revenue of approximately USD 2.46 billion and EBITDA of around USD 751 million.
Operating profit reached USD 618 million, while earnings per share amounted to USD 0.35. Compared with previous quarters, this represented a stable to slightly improved performance.
For the full year 2024, Sandoz recorded revenue growth of approximately 2% year-on-year.
Operating profit increased by more than 23% to approximately CHF 1.36 billion, while gross profit improved by nearly 6% to around CHF 4.31 billion.
These figures demonstrate solid margin development and strong operational performance.
The company’s next quarterly results for Q2 2025 are scheduled to be published on 7 August 2025. Until then, the latest figures remain the basis for the positive sentiment surrounding Sandoz shares.
In summary, Sandoz delivered revenue growth, a significant improvement in operating profit and stable margins during the latest reporting period.
The shares benefited from these solid results and the company’s continued positive outlook.
Outlook – June 2025
Opportunities
Easing tensions in the US–China trade conflict: Following successful negotiations, tariffs were temporarily reduced. This helped revive trade flows and supported equity markets worldwide.
Economic recovery in Europe: Expansionary fiscal policy and increased spending on infrastructure and defence could accelerate economic growth in Europe and support regional equity markets.
Stable or rising commodity prices: Gold remains in demand as a safe-haven asset and protection against systemic risks, helping to provide stability during periods of uncertainty.
Risks
Continued uncertainty surrounding US trade policy: Despite the short-term easing of tensions, future US trade policy remains unpredictable and could lead to renewed market pressure at any time.
Slowing global growth: The economic outlook is becoming less favourable, particularly in the United States and China, placing pressure on consumption and investment.
Inflation and interest-rate risks: High tariffs and rising wages, especially in the United States and Japan, could increase inflation and lead to further interest-rate increases, negatively affecting equity markets.
Performance Expectations
For June 2025, we expect a positive trend in international equity markets.
Stock Recommendation: Sandoz
This publication is provided for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any financial instrument. Past performance is not indicative of future results.
