By Silvano Grimaldi, CEO of the independent asset management firm Grimaldi & Partners AG.
Monthly Review
International equity markets ended March 2025 with losses.
Negative Factors
- Recession concerns in the United States: Analysts, including Goldman Sachs, raised the probability of a recession to as much as 35%, driven by Donald Trump’s protectionist tariff policies and their potential negative impact on the economy.
- Trade tariffs and uncertainty: Donald Trump’s unpredictable approach to introducing punitive tariffs against trading partners such as China, Canada and the European Union contributed to higher prices and weakened consumer confidence, as well as the competitiveness of US companies.
- Inflation and interest-rate policy: Concerns about rising inflation weighed on consumer spending, while high interest rates increased financing costs for companies. This made investment and economic growth more difficult.
- Volatility and market uncertainty: The CBOE Volatility Index rose sharply, reflecting increased nervousness across financial markets. Political uncertainty surrounding Donald Trump also contributed to a loss of confidence in the US economy.
Stock in Focus
Zurich Insurance Reports Significant Profit Growth
Zurich Insurance Group increased its operating profit by 5% to USD 7.75 billion in 2024.
Net profit rose by 34% to USD 5.81 billion.
The company also proposed increasing its dividend to CHF 28.00 per share.
Outlook – April 2025
Opportunities
Positive seasonality: Historical patterns indicate that equity markets have generally performed positively during April.
Continued attractiveness of US equities: The resilient US economy and technological progress, particularly in artificial intelligence, could provide support to equity markets.
Potential interest-rate cuts by the Federal Reserve: If the Federal Reserve lowers interest rates in response to economic weakness, this could support equity markets and encourage investment.
Risks
Trade conflicts and new tariffs: The introduction of additional tariffs and trade barriers, particularly by the United States, could place pressure on the global economy.
Weakening consumer sentiment: A further decline in US consumer confidence could indicate weaker consumer demand and negatively affect economic growth.
Rising inflation expectations: If inflation expectations increase, this could lead to higher interest rates and renewed pressure on equity valuations.
Performance Expectations
For April 2025, we expect an upward trend in international equity markets.
Stock Recommendation: Zurich Insurance
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.
