Winter comes before spring

Investors are already feeling the spring on the stock markets. However, in our opinion, this has come too early. We are expecting frostier months again and are therefore remaining slightly underweight in equities. However, we are placing more emphasis on gold.

Stefano Zoffoli

Cooler trading days are on the horizon. (Bild:

The euphoria among investors is back after strong price gains in November (global equities +10%). Thanks to lower inflation rates and slightly weaker economic data, there are hopes that central banks will soon cut interest rates, while corporate earnings expectations for 2024 remain in double digits. This Goldilocks scenario has given the market very strong momentum and also improved market breadth.

Equity rally is premature

However, our technical indicators point to an overly euphoric mood. We also doubt this Goldilocks scenario. There will probably only be sharp interest rate cuts in the event of a recession and then earnings growth is likely to be significantly lower. We therefore consider this equity rally - in which we have temporarily participated by increasing our Nasdaq position - to be premature.

Defensive positioning remains in place

Of course, the financial markets are already looking ahead to possible developments in the second half of 2024, but these in turn depend on the first half-year, in which we expect the US economy to contract. Under these premises, winter comes before spring. Despite strong seasonality, we therefore remain slightly underweight in equities and continue to favour Swiss equities. This is partly due to their defensive nature. Secondly, because they deliver higher dividend yields on average relative to the rest of the world. Following the decline in bond yields, we are now taking some profits and increasing our overweight in alternative investments, namely gold.

How do we currently assess the financial markets and how are we positioned?

  • The price of gold is currently hovering around the record levels of USD 2,075 set in summer 2020. The price rise occurred despite the ceasefire in the Gaza Strip, strong risk-on sentiment and low investments in gold ETFs, among other factors.
  • Technically, the chances of a new all-time high are good due to falling real yields and excellent seasonality. We are moving to a slight tactical overweight.
  • While AI (artificial intelligence) is likely to become the word of the year and various pure plays such as Nvidia have already benefited greatly from this hype, there are also opportunities outside of the pure AI sector.
  • Algorithms and AI models will be easy to replicate, but companies with a dedicated, proprietary big data strategy will create a sustainable competitive advantage.
  • We are building positions in the entire big data value chain and in various sectors and countries that are benefiting from the trend, are growing strongly and are not yet expensive.
  • With gold, the US dollar and global government bonds, we find some safe havens attractive. However, in view of the current fall in inflation, we are reducing inflation-linked US bonds. 
  • By contrast, the yield expectations for CHF bonds are rather moderate and we see little potential for falling interest rates in Switzerland.
  • The SNB is clearly opposed to interest rate cuts in the near future, while other central banks are likely to start much sooner.
  • We are slightly increasing our underweight in CHF bonds.

Tactical Asset Allocation in December 2023

Relative weighting vs. Strategic Asset Allocation (SAA) in % in November and December 2023 (Source: Zürcher Kantonalbank, Asset Management)


Investment Strategy