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T&V Commentary | Q4 2023

The year 2023 in one word: "The Magnificent Seven"

Meanwhile, the Nasdaq 100, the index of major US technology stocks, achieved its highest annual performance since 1999 - despite the rise in interest rates.


At the beginning of 2023, the stock markets briefly behaved as recession-obsessed investors had expected: badly.


However, the dull start quickly gave way to a rally dominated by a number of big tech names linked by the hot topic of artificial intelligence: Apple, Microsoft, Alphabet, Amazon, Tesla, Meta and Nvidia.


In June, the nickname "The Magnificent Seven" really began to take hold. By the middle of 2023, these stocks had jumped between 40% and 180%, pulling the leading US index, the S&P 500, up by around 14%, making it one of the strongest starts to a year in two decades. Without the Magnificent Seven, however, the index was flat. Since then, the strength of the stock market has broadened somewhat.


These seven stocks account for around 30% of the S&P 500. Their share is now so large that they not only dominate the US equity markets, but also make up a large proportion of the global equity markets.


For the financial markets, 2023 is a year for the history books in more ways than one. Interest rates on the bond markets have reached their highest level since 2007; the era of zero and negative interest rates, which has characterized the past 15 years following the global financial crisis, seems to be definitely over for the time being.

Roche and Nestlé weigh on the Swiss market

Stock markets that are normally considered a safe haven in stormy times, above all the Swiss SMI, were unable to escape the turbulence last year. Quite the opposite: they were hit the hardest by the dwindling appetite for risk. SMI heavyweights Nestlé and Roche, at least in previous years the epitome of stability and defensive character, fell by -6.70% and -12.80% respectively last year, dragging down the leading Swiss index. The SMI ended the year with a comparatively weak return of +3.80%. Roche has now lost more than 39% since its highs in April 2022. The focus is currently on the negative - and this is not only the case at the Basel-based pharmaceutical giant. The weak share price performance can be explained by a series of disappointments from clinical trials over the past two years and by missing out on the hottest topic in the pharma industry at the moment: weight loss drugs.

In addition, the suddenly competitive interest rates on government bonds are likely to have hurt many defensive stocks (consumer goods and healthcare stocks), as investors often used them as a substitute for fixed-income securities.

Inflationary pressure is easing

Meanwhile, the central banks were able to claim gains in the fight against inflation in 2023. Consumer price inflation gradually declined over the course of the year. Meanwhile, core inflation rates, excluding energy and food, are slower than the broad-based inflation barometer, but are also pointing in the right direction.

China, the world's second most important economy, is already experiencing tough deflation. This could have a positive impact on the western world this year, as imported goods will become cheaper or are already cheaper.

It is now clear to the financial markets that the global cycle of interest rate hikes has come to an end. For the coming year, the futures markets have already priced in six interest rate cuts by the US Fed of 0.25% each. Accordingly, the first rate cut is to be decided at the Fed meeting on March 20 and the Fed Funds Rate is to fall from the current 5.50% to 4.00% by the end of 2024.

The Swiss franc against (almost) all other currencies

The prospect of an interest rate turnaround by the US Federal Reserve has put pressure on the dollar. The USD depreciated by 8.99% against the Swiss franc in 2023. The euro did not fare much better, losing 6.12% against the Swiss franc.

Cryptocurrencies return with a brilliant bull market

Bitcoin managed to achieve a two-and-a-half-fold increase to over $42,000. Ethereum gained 100%. The possible introduction of the Bitcoin/Ethereum ETF and the upcoming "halving" of Bitcoin in the spring promise exciting prospects for the crypto sector.

Prospects for 2024

The global interest rates, which are likely to fall again soon, are likely to boost the hard-hit shares of small and medium-sized companies in particular.


As always, we would like to thank you for the trust you have placed in us and we look forward to investing together in 2024!


"The most realistic difference between investors and speculators lies in their attitude to movements on the stock market. The speculator's main interest is to anticipate market fluctuations and profit from them. The investor's main interest is to acquire and hold suitable securities at reasonable prices. "

Benjamin Graham, British-Americ. Economist and investor (1894-1976)

T&V Commentary Q4 2023
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