Stock market outlook 04/2025: Trump’s showdown with the world

April 9, 2025

What has been the focus in recent weeks

The last few days have felt like déjà vu for many. We remember: in the wake of coronavirus, the global stock markets plummeted by around 30 % within a very short space of time at the start of 2020. There was shock-like panic and the pessimism could hardly have been greater. But as we all know, panic has never been a good advisor.

What followed surprised the vast majority of people, but richly rewarded prudent investors: in the course of a subsequent rally, the losses were recouped by the fall and most stock markets even ended the year in positive territory.

In the last few days, practically nothing has been able to escape the waterfall-like sell-off, not even gold. This is a common pattern in a shock phase. With a little distance, however, a more differentiated picture emerges.

Our investment solutions and positioning

Our defensive orientation in our multi-asset solutions has paid off in recent weeks. With a high proportion of gold and Swiss real estate, we were able to cushion the decline on the global financial markets somewhat. The high proportion of Swiss francs also proved to be the right decision – our home currency has once again appreciated against almost all other currencies. We have underweighted US equities and thus also the major tech stocks. Times like the ones we are currently experiencing show how important diversification can be. Our insurance bonds, for example, have performed stably.

Also in our equity strategy Global Equity Trends the recent shifts into more defensive areas such as consumer staples and low-volatility equities have also paid off. Both categories were clearly among the relative winners. With the renewed pressure, further defensive elements have also qualified for inclusion in the portfolio. These are real estate shares and shares with a high dividend yield. If the decline on the stock markets continues, the strategy will gradually add further defensive elements thanks to its systematic approach. Should a new upward trend emerge, the defensive investments will give way to more dynamic investments.

In the equity strategy Swiss Equity Selection our overweight in Nestlé provided some stability. To make the portfolio less sensitive to volatility, we also added stocks such as Swisscom, Swiss Prime Site and BKW. Siegfried and Kardex, among others, had to make way for this. We expect the new additions to perform better in uncertain and changing market phases. In the long term, we continue to regard the Swiss equity market as attractive, even if it is of course unable to escape the global turbulence.

In the equity strategy Global Equity Selection equity strategy back in February to increase the cash ratio as an exception. We stepped up this step again at the end of March and disposed of some technology-heavy companies – at least temporarily. However, we continue to believe that high-growth quality stocks will prevail in the long term and can generate very attractive returns. After two very strong years in this segment, setbacks, as we are currently seeing, are unfortunately also part of this. From the perspective of a long-term investor, this can even be seen as a healthy correction. We are therefore endeavoring to reduce the cash ratio, which is held in Swiss francs, again when opportunities arise.

What next? And what needs to be considered?

We expect tariffs to continue to rise initially, which will have a negative impact on the financial markets. Agreements between various countries and the US and an easing of the central banks’ monetary policy should then lead to some easing. In the short term, however, the main focus will now be on companies’ first-quarter reports and the outlook. This is currently our main scenario at least. We are of course analyzing the current situation continuously and very closely.

We also continue to assume that AI will be a long-term driver of productivity increases and thus higher corporate profits.

Longer-term and diversified investors will be rewarded if they remain invested and / or invest additional capital in the event of setbacks. However, volatility is likely to remain high, which must be endured and not panicked about. Markets can turn very quickly. We have seen this over the last few days, when reports of progress on tariffs immediately led to sharp rises in share prices. History shows that such market phases can also be interesting entry opportunities for long-term investors. It is well known that the basis for the greatest stock market gains always arises from a crisis.

Point Capital Group
9. April 2025

Our experts: Jules Kappeler (CEO) & Christian Sutter (Portfolio Manager)