By Silvano Grimaldi, CEO of the independent asset management firm Grimaldi & Partners AG.
Monthly Review
International equity markets ended June 2025 with mixed performance.
US Markets: Main Factors Behind the Rise
- Broader technology-sector participation: US equity markets, particularly the Nasdaq, reached new all-time highs despite weakness among several large technology companies. Gains were supported by second-tier technology stocks such as Palantir, Zscaler and Micron Technology. The Nasdaq’s performance was notable because it was no longer driven solely by the “Magnificent Seven”, but by a broader range of technology companies.
- Easing concerns over tariffs: The initial nervousness surrounding US tariff policy subsided. Investors increasingly assumed that tariffs were primarily being used as a tactical negotiating tool, helping to stabilise markets and improve sentiment.
- Positive economic expectations despite signs of slowing growth: Although US economic growth slowed, markets continued to receive support from expectations of temporarily elevated GDP growth in the second quarter due to import effects, as well as resilient corporate earnings in the technology and financial sectors.
European Markets: Main Factors Behind the Slight Decline
Uncertainty surrounding US tariff policy and trade tensions: Growing concerns about the tariff plans of US President Donald Trump and mutual accusations between the United States and China weighed on European markets and contributed to a weaker start to June.
Political and fiscal risks in Europe: Announcements of excessive-deficit procedures and credit-rating downgrades, particularly concerning France, together with the announcement of new elections, increased sovereign-bond risk premiums and uncertainty across equity markets.
Weaker economic indicators and sector-specific pressures: European automotive stocks came under significant selling pressure, while only selected sectors, such as the oil industry, recorded gains. The general weakness of economic indicators also contributed to the negative market environment.
Stock in Focus
Richemont Remains Resilient in a Challenging Environment
During the 2024/25 financial year ending in March, Richemont recorded the expected growth in its jewellery division, led by its flagship brand Cartier, where revenue increased by 8%.
The watchmaking division, which includes brands such as IWC, continued to suffer from weak consumer demand in China and recorded a 13% decline.
Across the group, Richemont’s revenue in the Asia-Pacific region fell by 13%, led by a 23% decline in China, Hong Kong and Macau.
Although conditions in Asia showed some recent improvement, management emphasised that the situation in China remained challenging.
This contrasted with strong performances in other regions:
- Europe: +10%
- Americas: +16%
- Japan: +25%
- Middle East and Africa: +15%
Overall group revenue, excluding the divested online business YNAP, increased by 4% to EUR 21.4 billion.
Net profit from continuing operations reached EUR 3.76 billion, representing a decline of 1%. Nevertheless, the result clearly exceeded market expectations.
Shareholders will benefit from a higher dividend of CHF 3.00 per share, compared with CHF 2.75 in the previous year.
Outlook – July 2025
Opportunities
- Growing expectations of interest-rate cuts: Lower inflation data could reinforce expectations of an initial interest-rate cut in the autumn and support equity prices in advance.
- Strong Q2 corporate earnings, particularly in the United States and technology sector: Positive results from major US companies such as Microsoft and Apple could provide support to global equity markets.
- Stabilisation of the global economy: Leading indicators suggest a potential recovery, particularly in manufacturing and the services sector across Asia and the United States.
Risks
- Renewed inflation pressure in the United States or Europe: Higher-than-expected inflation figures could weaken expectations of imminent interest-rate cuts.
- Political risks in Europe: Continued uncertainty following elections, particularly in France, and concerns about European Union unity could trigger capital outflows.
- Escalation of geopolitical conflicts: Renewed tensions involving Taiwan, Ukraine or other regions could create a risk-off environment, particularly affecting European and Asian equity markets.
Performance Expectations
For July 2025, we expect a slightly positive trend in international equity markets.
Stock Recommendation: Richemont
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.
