The tech rally continues following a series of earnings reports. After the market closed yesterday, Google reported first-quarter results, with earnings reaching USD 34.5 billion, up 46% year-over-year. A significant contributor to this surge was USD 11.2 billion in "other income," representing a 293% increase from the prior year. This figure was notably driven by USD 8 billion in unrealized gains from the company’s investment in a private company.

The previous evening, Texas Instruments and ServiceNow also fueled optimism in the tech sector with solid earnings and upbeat commentary. Their outlooks offered no indication of weakening demand.

Markets: Nasdaq back in the leading, up three consecutive days, closing 2.8% higher last night and up 0.5% in the futures trading this morning. Interest rates, gold and the US dollar, all are taking a breather from their recent trends.

My view: Individual corporate earnings continue to be the primary driver of market gains. However, I remain doubtful that this rally has much further to run, unless we see unexpectedly positive economic data or real progress in trade negotiations that could lead to a preliminary agreement. The news flow on this front remains inconsistent: while US officials frequently reference ongoing talks with China, Beijing denies any substantial engagement.
Meanwhile, this week has been relatively quiet in terms of economic releases. Later today, the consumer sentiment index may shed some light on the stability of consumer spending and broader demand trends.

Tensions between Donald Trump and the US central bank ease. Donald Trump said that he has no plans to fire Federal Reserve Chairman Jerome Powell. Before US President Donald Trump called Powell “Mr. Too Late” and “a major loser” for not cutting interest rates.

Markets: Major Equity indices in green across the globe. Bitcoin saw a rally from USD 83’ to almost 95’000 within two days, gold is taking hit with profit taking, US 10-year yield back below 4.35%, while US dollar stabilizes after recent drop.

My view: At this point, buying equities feels more like a bet on hope and speculation than a decision grounded in fundamentals. With the latest correction, some stock prices may appear cheap now, but given the elevated valuations we have recently seen at market tops, there is still ample room for downside, especially in case a recession materializes, tariff issues remain unsolved, or new disruptive factors emerge.

The latest leading indicators published this morning for Europe suggest a less optimistic economic outlook. Until now, the service sector has been relatively resilient, but the most recent April PMI (Purchasing Managers' Index) points to a contraction. ahead. Later today, we will see the US figures.

At the same time, I keep a focus on the earnings season which is gaining momentum as more companies report. However, the Q1 earnings are becoming less relevant. What matters more now is the forward guidance. Uncertainties started by end of the first quarter. The significant tariff disruptions only began in early Q2.

The market patterns reminds me on the years of 2001 after the burst of the IT bubble. Markets tried to rebound each time after a selloff. However, the rebound did not materialize as it was not sustainable.
Given the mounting uncertainties and the lack of a finalized tariff agreements, I have strong doubts about the sustainability of this rally. It appears more like a short-term bounce rather than the beginning of a durable upward trend.

US President Donald Trump has repeatedly criticized Fed Chairman Jerome Powell for allegedly keeping interest rates too high.
Meanwhile, investors still wait and are missing meaningful progress in the ongoing tariff negotiations.

Markets: US stocks opened sharply lower with the Nasdaq losing more than 2% in the first trading hour. Interest rates down from 4.4% to 4.35% intraday, US dollar continues to drop while gold is trading first time above USD 3’400.

My view: Trump’s new focus on Fed Chair Jerome Powell comes after Powell’s stark warning on the potential effects of tariffs on the economy.

Global equity markets remain highly sensitive to tariff-related developments.
Shifting headlines and evolving narratives continue to fuel heightened volatility and sharp market swings.

Given these dynamics, I am maintaining my current positioning, anticipating greater downside potential ahead.

As fully anticipated by markets, the European Central Bank (ECB) made another 25 basis points interest rate cut today, lowering the key rate to 2.25%.
At the same time the ECB warns of a deteriorated growth outlook on trade tensions.

Already yesterday evening, Fed chairman Jerome Powell warned of a challenging scenario.

Markets: After yesterday’s sell-off in the US, European stock indices down around 0.5%, the Euro trading lower with interest rates moving lower, gold slightly lower after yesterday’s record high with the price remain well above USD 3’300.

My view: The seventh consecutive interest rate cut by the ECB had no immediate market impact, as it was fully anticipated. With inflation showing signs of stabilization, the central bank was able to proceed confidently with this move. Attention now shifts to the upcoming press conference and any forward guidance that may be offered.

Central banks continue to signal their readiness to act in the event of market turbulence. However, last week’s rapid sell-off in US Treasuries underscores how quickly sentiment can shift. As trade tensions persist, central banks remain on high alert.

The Federal Reserve now finds itself in a similarly delicate position to that of the ECB in recent months. Persistent inflation is keeping the Fed from cutting rates, despite mounting signs of a slowing economy that would otherwise warrant more accommodative policy.

This morning, China reported a strong set of data and surprising strength. China’s economy grew by 5.4% in the first quarter of 2025, higher than the 5.1% growth expected.
In March, the industrial output surged 7.7% from a year earlier, higher than median estimates of 5.8%. The country’s retail sales rise 5.9% on an annual level in the same period.

In the meanwhile China signaled to be open for talks. Before though, they want to see a number of steps from President Donal Trump’s administration before it will agree to trade talks, including showing more respect. Before, China stopped the export of rare earths and today, Hong Kong government announced that Hong Kong Post will immediately suspend accepting packages for delivery to the US.

Markets: Asian markets traded mostly lower this morning.

My view: China's latest production and consumption figures show surprising momentum, even ahead of this month’s tariff tensions. However, despite the strong data, concerns over the looming trade barriers weighed on investor sentiment, sending Asian stock markets lower this morning, led by the tech stocks after Nvidia’s and ASML disappointing news.

For me, the uptick in consumption looks particularly encouraging, as it has lagged since the pandemic. If this rebound proves to be sustainable, it could make China’s economy more resilient to tariff-related shocks, especially in contrast to the US, where consumer sentiment has already fallen to historic lows.

Although I maintain a positive outlook on China’s stock market, I took some profit before the financial market before the recent market turmoil began. I still hold a significant allocation, but currently holding off increasing exposure as risks of further setbacks remain elevated, particularly if the US economy slides into a recession.

After market close on Tuesday, Nvidia said that it will take a quarterly charge of about USD 5.5 billion tied to exporting H20 graphic processing units to China and other destinations. The US government said it would require licenses for exports to China of its H2O artificial intelligence chips. This chip is one of Nvidia’s most popular.

During President Biden’s administration, the US restricted AI chip exports in 2022 and the updated the rules the following year to prevent the sale of more advanced AI chips.

Markets: Nvidia tumbles more than 5% in extended trading, dragging the Nasdaq Future down more than 1%.

My view: This is a sign, that Nvidia’s growth story could be slowed by increasing export restrictions on its chips. The chips could be used to create supercomputers for military uses. Why some restrictions in current environment of global tensions could make sense.

However, Nvidia’s disclosure could hit the semiconductor sector and overall market in its current vulnerable conditions.
I therefore expect more downside from here, why remaining short positioned in this specific sector and for tech stocks.

The latest changes in US tariffs were announced Sunday evening in a somewhat chaotic manner. After certain number of statements it was then clear that the US has decided to temporarily suspend tariffs on electronic goods such as smartphones, computers, and semiconductors. It is a temporary exempt from the reciprocal tariffs, including the baseline 10% rate on all countries. This exemption applies to the baseline 10% reciprocal tariff imposed on all countries — with the notable exception of China. Goods from China in these categories will continue to face a 20% tariff. President Donald Trump stated that these goods will soon be placed in a separate “tariff bucket,” with further details expected shortly.

US, weak economic signals:
US consumer sentiment in April dropped further, hitting its lowest level since June 2022 and marking the second-lowest reading in the survey’s history, which dates back to 1952. At the same time, inflation expectations surged to 6.7%, a level not seen since November 1981.

China’s Export Surge:
In China, economic indicators were also mixed. Exports jumped 12.4% year-over-year in March, providing a timely boost to the economy ahead of the anticipated tariff hikes. However, imports declined by 4.3% year-over-year during the same period.

Markets: Global stock markets extended their recovery, regaining more of the recent lossesUS dollar continued to decline, gold hold more steady above USD 3’200, interest rates moved lower.

My view: The latest tariff news provided a boost to equities, prompting investors to increase exposure after the recent slump. According to analyses, private and retail investors were the once heavily buying. However, markets appear to be overlooking the fact that the tariff relief is only a temporary pause, similar to the reciprocal tariff measures. New tariffs, including on pharmaceuticals, could be introduced at any time.

Given these unresolved uncertainties, I am not adding significant exposure at this stage. I expect markets may give back some of the recent gains as clarity remains limited and fears of a recession could get more room.

While tariffs have dominated the headlines lately, it's worth remembering that earnings season kicks off today. Among the first to report are major financial institutions, including JPMorgan, BlackRock, Wells Fargo, Morgan Stanley and Bank of New York Mellon.

Markets: US bank stocks marked a strong 2024, however, fell from their recent highs with trade tensions.

My view: While Q1 figures will be closely watched, forward-looking guidance may be even more critical, offering early insight into corporate health and investor sentiment in a market already rattled by escalating trade tensions.

In the US, outstanding loan payments are on the rise. Combined with trade uncertainty, higher interest rates, and rising consumer prices, this trend has the potential to escalate into a more serious issue. Given these headwinds, I am staying on the sidelines when it comes to bank stocks.

After the US imposed a steep 145% tariff on Chinese imports yesterday, China has responded by increasing its own tariffs on US goods to 125%, up from the previous 84%. The tit-for-tat escalation underscores mounting trade tensions between the two largest economies.

Markets: Globally stock indices turning red, gold above 3’200 for the first time, US dollar slumps with dollar index down more than 1.5%, US interest rates hovering around 4.4% level. Cryptos trading stable

My view:

Compared to the initial tariff announcements, markets no longer react with the same intensity. However, each new development in this tariff battle seems to nudge stock indices further into negative territory, setting off steady downward trends.

This ongoing back-and-forth between the world’s two largest economies feels like a playground contest, two kids seeing who can say the bigger number. I am just waiting for one of them to shout “infinity… infinity+1…”

My view remains unchanged, the US may actually be more dependent on China than the other way around. Regardless of who has the upper hand, this trade war is clearly hurting the global economy. It weighs on sentiment and clouds the short- and mid-term outlook with uncertainty. To make matters worse, the weak US dollar makes imports even more expensive, adding further pressure to already sticky inflation. Not a good sign for upcoming inflation figures and the consumer sentiment.

The Nikkei index in Japan and European indices surged this morning, following the strong rally in the US yesterday.

The European Union has decided to postpone countermeasures to US tariffs for 90 days.

In the US, inflation data (CPI) released this afternoon came in surprisingly lower than expected. Prices rose by 0.1% in March, down from 0.2% last month (forecasted 0.3%). On a yearly basis, inflation stands at 2.8%, down from 3.1% (forecasted 3.0%).

Markets:

My view: Give up gains and are trading negative in the US. Oil price slumps. US interest rates are going up, even with lower CPI data. Gold back over USD 3’100/oz while US dollar is losing strongly.

As I already mentioned in my last post shortly after midnight, I do not believe that this rally will last as buying stocks after such a day, there is a small chance to materialize. Parallels are being drawn to the biggest intraday rally in 2001, when Nasdaq gained over 14%. Following that, the index lost more than 50%, and it took six years to return to break-even.

At the moment, having access to a trading platform with pre-market capabilities is valuable. Currently the moves in the pre- and after-market trading hours are significant, offering opportunities.

As a result, I closed my short volatility position this morning with profit and have since opened a long volatility position by purchasing an ETF. Additionally, with the rally reaching extreme levels, I have initiated new short positions on the Nasdaq and in semiconductors.

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Yesterday, US markets posted one of the strongest intraday gains in history, with the Nasdaq surging over 12%, its biggest rally since 2001 and the second-best day on record. The sharp rebound came after US President Donald Trump announced a 90-day pause on some tariffs, sparking a wave of investor optimism and aggressive short-covering across sectors.

Markets: Nasdaq Index gained more than 12%, Dow Jones Index almost 8% while S&P 500 Index jumped 9.5%. Together with the stock markets, cryptos and commodities rallied, interest rates took a breather with 10-year yields back to 4.35% after hitting briefly 4.5% intraday, while the US dollar gained back some ground. Gold was able to defend its intraday increase of 3%.

My view: We have just witnessed one of the most volatile short-term periods in market history, marked by extreme swings and, remarkably, driven largely by the actions and statements of a single individual. The sheer scale of market impact from such announcements is unprecedented and gives more than just a hint of insider dynamics at play.

Many institutions were caught off guard, myself included, at least to some extent. In response, I made gradual adjustments to the portfolio starting this week. Just a bit ahead of yesterday’s major announcement, I closed out the long volatility position and rotated directly into a short volatility ETF, positioning for a potential cooldown in market turbulence after volatility had reached extreme levels. It was just the right timing.

Markets are celebrating, but many seem to overlook that the tariffs have not been removed, only paused for 90 days. The uncertainty remains high, particularly for companies that have already started adjusting their strategies in response to the initial tariffs.

One pressing question: what happens to goods imported yesterday that were technically subject to the new reciprocal tariffs? There is still no clear guidance, highlighting just how chaotic and unpredictable this environment has become.

Based on this remaining high uncertainties and unpredictability, I am not sure how sustainable this super-rally really is. Should volatility levels begin to normalize, there is a stronger chance I will pivot back to a long volatility position. The underlying uncertainty has not disappeared, it might simply be delayed.

The trade battle between the world’s two largest economies, China and the United States, has entered a new and more aggressive phase. In a bold show of force, China announced today that it will impose 84% tariffs on US imports. This follows US President Donald Trump’s decision yesterday to increase tariffs by 50%, bringing total duties on Chinese goods to 104%.

Trump’s so-called "reciprocal tariffs" took effect today, targeting around 60 trading partners with whom the US runs trade surpluses. This follows the implementation of a baseline 10% tariff on most US trading partners, which came into force on Saturday.

In response, China has pledged to continue taking “resolute and forceful” countermeasures. As of now, there has been no official response from U.S. political leaders regarding China’s latest move.

Adding to market jitters, there was a fire sale of long-term US Treasuries overnight, a development that could signal further financial instability if tensions escalate.

Meanwhile, in a somewhat under-the-radar move, the European Commission announced countermeasures targeting EUR 21 billion worth of US imports. These duties are expected to be collected starting April 15. The EU emphasized its strong preference for a "balanced and mutually beneficial negotiated outcome" in its official statement.

In Germany, coalition talks have concluded with an agreement to form a new government.

Markets: Chinese equity markets saw an increase last night, European markets with another bad day deep in the red, US indices with a try of stabilization, US long-term interest rates with a strong up move from 4.2% to 4.5% within few hours, gold up +3%, US dollar and oil weak, metals in plus. Cryptos also with signs of stabilization after the dip earlier today.

My view: I am not surprised by China’s latest move. The country has the strength and strategic positioning to play this game. With ample foreign exchange reserves, China has the ability to stabilize its own markets. Today’s positive market performance suggests that government-backed equity purchases may have taken place to restore investor confidence.

China remains the second-largest holder of US Treasuries, with approximately USD 760 billion. What caught my attention is that the origin of last night’s fire sale in long-term Treasuries hasn’t been clearly identified. To me, this looks like a calculated signal from Beijing, designed to rattle global markets and remind the US of its financial interdependence with China. If China would aggressively liquidate its Treasury holdings, it could send US interest rates soaring, causing significant economic disruption.

Interestingly, we’ve also seen a pause in the recent downtrend of some key commodities today. This could be an early sign that the fight for strategic resources is heating up, a theme I have been watching closely.

In light of these developments, I have taken some tactical positions in the ETFMandate portfolio today. As always, all Premium Members received immediate updates on these investment decisions earlier today.

Markets are taking a breather after the wild ride during the last days. Tariffs remain the driving topic. The Chinese government has expressed a firm stance, stating it will "fight to the end" in the face of escalating trade tensions. The EU is trying to find a deal and proposed a "zero-for-zero" tariff agreement to eliminate tariffs on industrial goods. US President Trump has stated that for the EU, to receive relief from these tariffs, it must commit to purchasing USD 350 billion worth of American energy.

Markets: With US coming back to market today, the rebound started to gain some traction. The crypto rebound stalls, US dollar is loosing ground, Swiss franc is getting stronger, gold trading above USD 3’000/oz

My view: After making small adjustments to the portfolio allocation yesterday, I am now taking a wait-and-see approach before making any further changes. The situation remains uncertain until we gain a clearer understanding of the impact of tariffs on both the US and global economies. The probability of a recession is rising. JP Morgan currently addressed a 60% chance of recession in the US.

In the short term, it is crucial to observe how things unfold over the next few days, not just in terms of news flow but also investor behavior and technical indicators. Drawing from my professional experience, I have a solid understanding of institutional investment processes and timelines. Should they decide to adjust the positions of the portfolios of their clients, this is going to happen during the next days and will impact the markets as high volume is traded.

It is worth noting that institutions had previously advised twice their clients to buy the dip before the recent sharp sell-off. As a result, their current allocation may now be too high for the current environment of uncertainty and elevated volatility.

What concerns me, though, is the growing consensus. Many investors may use the recent rebound as an opportunity to offload positions and therefore we may be heading into a new downward leg in the market.

Since the announcement of reciprocal tariffs by US president Donald Trump last Wednesday, financial markets have experienced their most significant sell-off since the pandemic-induced crash in 2020. Major indices have dropped by around 5% or more.

The Nasdaq has officially entered bear market territory, falling over 20% from its recent peak. Meanwhile, the sentiment remains deeply negative with the Fear and Greed Index registering its sixth consecutive week in “Extreme Fear” zone.

Markets (during Weekend): Nasdaq -1.8%, Dax -1.7%, Hang Seng -1.6%, cryptos with heavy losses, Bitcoin down 5%.

My view: As mentioned on Friday, I continue to see room for further downside. The process of risk unwinding by institutional investors could be just at the beginning. The recent spike in volatility is forcing them to reduce risk exposure in their portfolios in order to manage overall portfolio risk.

That said, the market could experience a bounce, should any news emerge that improves sentiment or supports a more positive outlook. Such a rebound however, could be used for unloading risks.

I am closely monitoring both market movements and the news flow. I do not see parallels to the pandemic-driven crisis. Back then, we faced a sudden, short-term shock that impacted on the global economy briefly, followed by swift and coordinated support from central banks and governments.
Today, the situation is different. The escalating trading war has the potential to spiral into a prolonged drag on global growth, ultimately increasing the risk of a broader recession.

During the pandemic, I invested all cash in three steps, one a bit too early, one near the bottom and one shortly after the initial rebound. This time is different though. Given how this current setup looks to me, I am avoiding reactive moves or speculative chases. I prefer to wait for clear and convincing signals before increasing exposure.
Based on the speech from Fed chairman Jerome Powell on Friday, there is not much room for the Fed to lower interest rates to calm down markets. “We are here to tell the truth. The truth is tariffs are pushing prices up and significantly slowing economy:”

The portfolio has remained relatively stable through the current market turmoil, so I see no need to make any significant adjustments at this stage.

No, it is not November yet. However, on financial markets it feels like everything is on sale.
Indices were not able to recover from yesterday’s sell-off yet when China announced tariffs on all US goods with 34%. In addition, the Ministry of Commerce announced new sanctions. It added 11 companies from the US to its unreliable entity list and placed 16 US-based entities on the export control list.

Furthermore, President Trump said that tariffs on the Chip and Pharma sector will be announced soon. So far they were excluded from the latest round of tariff announcements.

Markets: European indices currently down between 4-5%, US Futures down around 3%, oil loses another 6%, US 10-year Treasury below 4% (3.9%), gold flat, cryptos turning red after trying to recover.

My view: Once feared by all and dismissed by many, the trade war is now a reality. Its impact on markets is about to intensify.

My first strategy, to navigate the portfolio through the storm, with a focus on limiting the downside which is currently working quite well. Even with some heavy losses on certain positions, the losses are covered from the side of short positions keeping the portfolio in balance for the time being.

And the key question now is, what is the next news and catalyst poised to impact the markets?

And second, is it the moment to buy the dip?

At this stage, this still does not look like a buying opportunity to me. Fear is clearly widespread and intensifying, the sentiment has clearly shifted into panic mode. A sign of full capitulation could then be a first step back into adding new risk exposure. However, if the recession scenario is becoming real, there is more room for downside!

Big announcement of the “liberation day” tonight by US president Donald Trump, showing a big board to the audience with tariff figures charged to listed countries starting by tomorrow.

Markets: Nasdaq lost almost 2.5% in the after-hours trading, down more than 3% from its closing level. Dax future down 2.5%, Nikkei down 2.3%, US Small Caps down 4%, cryptos lose their bigger gains today trading in minus now, no big moves in currencies yet, gold with small gains.

My view: I am not surprised by the initial market reaction; what’s more striking is the positive and optimistic stance investors have taken, buying stocks ahead of such a major event with potentially significant market implications.

It was the right decision to refrain from following the recent "buy the dip" trend and instead maintain a cautious portfolio allocation, given the broader and ongoing uncertainties.

Today, US President Donald Trump will announce new tariffs. He is calling it “Liberation Day,” saying it is a big move to protect American jobs and businesses.
These new tariffs are reciprocal, which means the US will now charge other countries the same taxes they charge American products. For example, if Europe taxes American-made goods at 20%, the US will now tax European goods at 20% too.
A 25% tax on all imported cars and car parts, was already announced and will start tomorrow.

Markets: After the rebound yesterday, stock markets continue to lose ground today, interest rates down.

My view: I was surprised by the recent rebound. Overall, the stock market seems a bit too relaxed about the tariff announcement. The big question remains: how significant will the tariffs be, and how will other countries respond?

For now, I am staying on the sidelines with new investments until there is more clarity on the situation.

The latest inflation numbers published on Friday afternoon came in higher than expected. The core personal consumption expenditures (PCE) price index rose 0.4% in February, above economists' 0.3% forecast. This pushed the 12-month inflation rate to 2.8%, exceeding the projected 2.7%.

At the same time consumer spending increased 0.4%, below the forecast of 0.5%, while the personal saving rate reached 4.6%, its highest since June 2024.

Markets: Markets left the week in deep red zone. The Nasdaq index down on Friday 2.6%, lost another 0.5% more in the after-hours trading; US 10-year yield down to 4.24%, gold with new all-time high at USD 3’086 per ounce. Global stock markets and cryptos joined the sell-off. Cryptos continue today trading lower.

My view: It is not a surprise that latest economic data was not well received. Investors are increasingly concerned about potential stagflation, where inflation remains persistent despite slower economic growth.
If upcoming US data continues to signal stagflation/recession, markets are likely to shift further into defensive positioning and risk-off mode. Let’s do not forget, investors recently added risk by increasing the equity exposure in their portfolio while buying the dip. That new allocation is already in minus.
My current positioning, however, is holding up well. I always maintain a core equity allocation, but I have been scaling back long-term positions gradually since the start of the year. At the same time, my short positions built tactically over that period are now paying off, helping keep my portfolio solidly in the green, despite the broader sell off.

Funds recorded substantial inflows last week, marking a new milestone. According to a Bank of America survey, global funds attracted approximately USD 43.4 billion in assets over the five trading days. The bulk of the growth was driven by U.S. markets, while European equity funds saw record-breaking inflows of USD 4.3 billion - the highest on record.

Markets: Today, markets remain broadly under pressure, with widespread weakness across stocks, bonds, and cryptos. The only bright spot is commodities, where gold and industrial metals are showing gains.

My view: It is very interesting to see that a large crowd, including major investment houses, jumped in to buy the dip - after all, it is a strategy that worked well for a long time. However, those who follow my commentary know that I have consistently taken a different stance. I have made it clear that I do not share this view and will not join the mainstream this time.

Holding a contrarian view in moments like these is not that easy, but it is a key ingredient in successful investing. Staying true to your own perspective and strategy, even when the noise is loud and the crowd is moving in the opposite direction, often makes all the difference.

Since I began regularly sharing my views here on Market Insights, the market has largely moved in line with my expectations. This approach has well paid off in my portfolio, especially during periods of heightened volatility and when major indices are even trading in negative territory.

Stock markets remain highly volatile. Following a recent correction - defined as a 10% decline from the recent peak - in US indices such as the Nasdaq and S&P 500, markets have rebounded modestly over the past several days. Yesterday, the markets added slight more gains, albeit on lower trading volumes.

Investors continue to seek clear guidance amid ongoing uncertainty. The latest consumer sentiment report this week, highlighted persistent weakness, reflecting growing concerns over economic conditions. Investors are now turning their attention to today's release of the U.S. durable goods orders report, hoping it will provide further clarity on the state of the economy.

Markets: today US futures trading sideways. Europe stocks continue to decline, interest rates see some more pressure on the upside. gold stable above the USD 3’000 level, cryptos with small gains.

My view: With trading volumes diminishing, the recent market rally could quickly run out of steam. Could this signal a “bull trap” - a scenario longtime not seen, in which prices temporary rise, encoring investors to buy, anticipating bullish momentum to continue, subsequently turns out to be temporary or false.

My perspective remains contrarian. I remain cautious about buying into this dip while strategists from prominent investment houses advising clients to accumulate stocks at current levels, even on high number of uncertainties. Numerous geopolitical and economic concerns persist: a ceasefire between Russia and Ukraine remains far away, tensions in the Middle East tensions seem to re-escalate, and looming US tariffs add further instability. In Germany, following recent elections, there was an agreement on a new debt package aimed at infrastructure projects and military aid. However, practical implementation will require significant time, and the formation of a governing coalition has yet to be finalized.

US indices see a bounce today, driven by rumors of softer stance on tariffs from the White House. President Trump may impose fewer tariffs and should spare certain sectors from tariffs on April the 2nd.

Markets: US markets rally led by tech stocks, with Nasdaq up towards 2% while major stock markets in Europe and Asia continue to struggle. Interest rates see an uptick, USD slightly stronger while investors take some profit on gold. Crypto prices with an upswing.

My view: The rally was initiated by cryptos already late Sunday evening with some investors taking the risk to buy risk assets and play this rumors. Even my tactical allocation does not mirror today’s market move, I do not follow such speculations and keep a certain cautious stance as a high number of uncertainties remain (global tensions with re-escalation in Middle East, Russian war, German government formation, trade war etc.)

The Federal Open Market Committee (FOMC) left the fed funds rate unchanged, as expected. The Fed indicated they see half a percentage point of rate cuts for 2025, which typically means two reductions.
At the same time, the central bank lowered its projection for US economic growth in 2025 to 1.7% from 2.1% in December, while raising its inflation outlook to 2.8% from 2.5%.
Furthermore, the committee announced to slow the pace of the quantitative tightening, reducing the pace of shrinking its balance sheet by selling bonds.

Markets: US markets jumped with Nasdaq closing the day up 1.3% while S&P 500 Index gained 1.08%. The 10-year Treasury fell down to 4.23% from 4.3% while short rates were going north. USD declined while gold price saw an uptick.

My view: I was surprised investors reacted so positively to the Fed's statement, given that the economic outlook appears less favorable and uncertainties about the impact of tariffs persist. Investors seem unconcerned about the increasing probability of an economic downturn and the potential escalation of the trade war. As a reminder, the next significant tariff announcement is scheduled for April 2nd.

My view on interest rates remains consistent: there is room for rates to decrease, particularly on the longer end. This outlook applies to Europe as well, with the recent spike in interest rates during March following Germany's announcement of a EUR 500 billion debt package.

Therefore, I continue to maintain my long-term Treasury position, established when the 10-year yield reached 4.8% back in January.

Regarding equities, I retain a cautious stance, even after the recent market correction.

The market is widely expecting the US central bank to keep interest rates unchanged at its upcoming meeting today. However, attention will focus on Chairman Jerome Powell's comments amid rising concerns over economic confidence. These concerns have intensified due to President Donald Trump's escalating trade disputes and tariffs, increasing fears of potential stagflation. The Fed's statements on these economic challenges will be closely watched for reassurance and guidance.

Markets: US interest rates are moving sideways during recent days with the 10-year Treasury yield hovering around 4.3%; gold above USD 3’000 continues the uptrend; US dollar continues to decline against major currencies

My view: Given that recent inflation figures and consumer expectations remain significantly above the Federal Reserve's target of 2%, there's currently no room for an interest rate cut. Investors appear overly optimistic, anticipating hints of potential future rate cuts in today's Fed statement. However, the economic situation remains uncertain, particularly considering the unclear impact of tariffs on economic growth.

Political uncertainty continues and may even intensify, particularly with the upcoming second and major round of tariffs scheduled for April 2nd. This could further increase market volatility and elevate recession risks.
Should a recession occur, it is likely that US president Donald Trump would place blame on Fed Chairman Jerome Powell for not proactively lowering interest rates beforehand.

Under such a scenario, the stock market faces additional downside risk, potentially triggering a further correction with spillover effects on European and Asian markets. Long-term interest rates could decline further, whereas short-term rates might experience upward pressure.

A European company announced this morning ambitious targets for 2025, aiming for a year-on-year revenue increase of at least 40% and an adjusted EBIT margin exceeding 20%. Based on its previous year's revenue, the company projects EUR 60 million in revenue for 2025.

In 2024, the company achieved revenues of EUR 41.7 million, up from EUR 38.1 million the year before. Despite these positive growth figures, the company's current market capitalization stands at over EUR 1.3 billion.

60 million revenues vs. EUR 1.3 billion market cap!

The company is Steyr Motors AG, engaged in the defense sector, currently en vogue. The company is a manufacturer and distributor of diesel engines for heavy-duty vehicles, boats, and generator sets.

Markets: German DAX Index is pushing toward all-time highs, driven by news of a debt-financing package aimed at stimulating the economy and bolstering military defense efforts.

My view: To put this numbers into perspective: if Nvidia were valued at similar revenue-to-market cap multiples, its share price would be around USD 249. However, Nvidia’s share price is trading around USD 120 this afternoon.

While Steyr Motors AG benefits from operating in the currently booming defense sector, this valuation appears overly speculative. The stock of Steyr Motors is bought blindly without raising concerns about its valuation, just on hope to benefit from current rally.

Stay away from such speculations. The recent surge in defense stocks and European markets seems to be heavily reliant on optimism and capital inflows, much of it likely reallocated from US stocks. Valuations appear unsustainable without corresponding fundamental growth.

The latest US consumer survey, released last Friday, indicated sentiment at its lowest level since 2022 and below market expectations. According to the survey, the consumer sentiment index posted a mid-March reading of 57.9, a 10.5% decline from February, falling short of the consensus forecast for 63.2. At the same time, the one-year inflation outlook spiked to 4.9% (4.4% expected), marking the highest reading since November 2022.
Meanwhile, today’s retail sales data for February revealed modest growth of just 0.2%, also missing expectations of an 0.6% increase.
In contrast to the disappointing economic data from the US, recent figures from China have notably more positive and encouraging. China’s industrial production grew by 5.9% in February (5.3% expected). Consumption also demonstrated signs of acceleration, with retail sales rising by 4% year-on-year (3.8% estimated) in the first two months of the year.

Markets: US markets saw a bounce after briefly entering a correction territory (decline of 10%). China stock markets continued their upward trend.

My view: In the United States, consumer spending is by far the biggest driver of the economy, with personal consumption expenditures accounting for nearly 70% of the nation’s GDP. Consequently, if the consumer sentiment remains subdued, the likelihood of the US entering a recession increases significantly.

If a recession in the US materializes, further downside in US markets is likely, potentially triggering spillover effects across global markets.

Given the elevated risks, even after the recent market decline, I am cautious about aggressively chasing opportunities. Having taken broad-based profits, including from some long-term investments in recent weeks, I remain highly selective about new purchases. My tactical positioning remains unchanged: staying short on selected US tech stocks and semiconductor sector, while maintaining a long stance on Chinese internet stocks, which continue to represent my preferred region.

Should Chinese markets experience a pullback in the coming days, I may further increase exposure in this area.

Recent data indicates softer inflationary pressures, as the U.S. consumer price index released on Wednesday rose only 0.2%, slightly below analysts' expectations of a 0.3% increase. Today's published wholesale prices remained flat, further signaling easing price pressures in February.

Despite this positive inflation data, investor sentiment remains cautious, prompting shifts in portfolio allocations toward a recession-focused outlook in the U.S. market. This is reflected in recent sector performance trends, with technology, financials, and consumer cyclical stocks experiencing declines, while sectors such as energy, consumer staples, and utilities gained momentum.

Meanwhile, geopolitical tensions remain elevated, with Russia recently rejecting a proposed 30-day ceasefire in Ukraine.

Markets: global stock markets decline on a broad base, interest rates trending sideways, US dollar gains back some ground following recent losses, gold with new all-time high, cryptos sideways trending to losing ground.

My view: Following recent heavy losses, including Monday’s sharp decline - the worst since 2022 - markets tried to claw back some ground yesterday with a modest recovery. However, the rebound lacked certain strength, signaling to me a potential risk of further downside.
Currently, technical indicators provide little support for a sustained market recovery. On the contrary, technical strategies increasingly suggest downgrades. At the same time the investors sentiment remains on “extreme fear” level, an unusual persistence lasting over two weeks already. Typically, such extreme sentiment is short-lived and acts as a contrarian indicator, presenting buying opportunities. Current market conditions are definitely different, fueled by high number of uncertainties. With the Ukrainian war and trade war to continue there is not much evidence that markets should calm down and investors gain back some confidence in the near-term.

I believe the recession scenario should be taken seriously, as the probability is clearly rising.

In the ETFMandate portfolio I further reduced my overall equity exposure by taking selectively profit on European stocks together with tactical short-term investments and by adding only few positions with a long-term investment horizon.
My exposure to the financial sector has now been significantly decreased, approaching nearly zero. After previously exiting all positions in US financial stocks, I have recently reduced exposure to European banks and insurance companies over the past two weeks. For the time being, only select UK financial holdings remain in the portfolio.
In addition, with the recovery move yesterday, I re-opened the short call on semiconductors via a short ETF.

In recent years, private equity has gained significant traction as an attractive investment option, driven by an extended period of historically low interest rates and subdued returns from traditional asset classes. Initially accessible and favored by institutional investors, private equity has increasingly become accessible to private investors as well, drawn by the potential for higher returns.
Private equity offers distinct characteristics, including: illiquidity, leverage, limited transparency, higher fees, long-term investment horizon, potential of higher returns.
This combination of higher return expectations for investors and attractive fee structures for banks has created a compelling win-win scenario, making private equity an increasingly popular component of diversified investment portfolios.

Markets: Volumes in the private equity market have grown significantly in recent years, driven by strong demand, fueled by the performance and return potential. As a result, private equity firms have raised substantial amounts of capital, creating considerable pressure to identify and pursue attractive new investment opportunities.

My view: I always aim to think ahead and proactively prepare for potential market scenarios. Currently, the market is not yet in panic mode, as illustrated with my last comment on Market Insights “Recession fears”. However, if the current sell-off continues, it could trigger a cascade effect involving stop-limit orders by technical indicators and margin calls, leading to increased downward pressure and possibly leading to a short-term market collapse.

Private investors, particularly those advised by banks, remain significantly invested in the tech sector. Should market sentiment deteriorate further, fear could prompt these investors to reduce exposure to limit losses or secure profits, significantly increasing the supply of shares in the market.

Several factors are converging to create heightened uncertainty, including recent political turmoil and an increasingly unpredictable economic trajectory. Additionally, the market currently has a substantial population of speculators lacking deep market experience, who until now have consistently relied on buying dips. This strategy, effective during recent years, is now failing to yield the same results, with many speculators rapidly exhausting available capital. Consequently, the diminished buying power could substantially reduce market demand.

This scenario, characterized by increased supply and dwindling demand, poses a tangible risk of further stock price declines, potentially escalating into a market crash.

Notably, private equity has yet to experience a genuine financial storm. The brief market downturn during the covid pandemic quickly reversed within a matter of months, and thus does not represent a true crisis scenario. However, the current situation seems fundamentally different. If negative momentum intensifies, the likelihood of a significant market crash grows considerably.

Given private equity's inherent illiquidity, simultaneous investor withdrawals could amplify market stress, potentially leading to systemic consequences like of a house of cards collapsing, adversely impacting private equity portfolios and financial institutions alike.

Although this is not yet my primary outlook, it has become a critical scenario I actively consider in my investment decision-making process.

The market sell-off is intensifying, driven by deteriorating investor sentiment. Fears of a recession have resurfaced following recent political turmoil, though in the US, current economic data do not yet indicate such a downturn.

Markets: Global stock markets are firmly in the red, extending losses from Asia through Europe to the US, where the Nasdaq is currently down 3.3%. Interest rates remain broadly stable, gold prices show little movement, and commodities are mostly lower. Cryptocurrencies experience significant losses, with Bitcoin falling below USD 80’000. Meanwhile, the Swiss franc has lost some ground against major currencies.

My view: The sentiment index continues to indicate an "extreme fear" level; however, I do not see markets yet in panic mode. Correlations among equities and across various asset classes have not yet converged towards 1, a scenario typically observed during periods of intense market stress when investors indiscriminately sell risk assets and rush into cash, causing all asset classes to move in the same direction. However, volatility continues to rise as expected.

With recession fears coming back, sector rotation can be observed, from the cyclical to more defensive sectors such as energy, consumer staples and utilities. With the exception of utilities, my portfolio has a larger allocation to energy and consumer staples, selectively built up over an extended period.

Momentum strategies are currently out of favor. My contrarian investment philosophy is exceptionally well-positioned to capitalize on these market conditions.
As highlighted during recent weeks already, I have recently initiated short positions in overhyped stocks, continued taking profits on equities with strong recent performance, and selectively bought stocks that have been heavily beaten down or neglected.
Today, I continued to reduce exposure by taking profits in select European equities and financials as well as some Chinese stocks which have delivered strong gains since the beginning of the year.