Weekly Report 01/2026

Quiet trading days

Not much is likely to change in the final trading hours of the 2025 calendar year. Christmas is over and there are only two trading days left until the end of the year, three in some places. Not only have people settled down, but so have the stock markets. Trading volume remained low. Nevertheless, there are signs of positivity, especially in Europe, where companies’ earnings forecasts for the coming years are clearly trending in the positive zone.

Since the beginning of the month, however, the dollar has fallen so sharply that US markets have had a negative impact on the global stock index. Although the S&P 500 Index and the technology-driven Nasdaq gained around 1% in local currency terms, this resulted in a return of -0.7% in Swiss francs. The overall global equity index slipped slightly into negative territory (-0.1%) in December, as the stock market rally in Europe had little impact.

The Swiss Market Index (SMI) performed well, closing at 13,242 points, 3.2% higher than at the beginning of the month. The main contribution came from UBS (+19%), whose shares we do not typically hold in our portfolios. The bank’s orientation and its regulatory environment in recent years have proven too unstable. Nor do we hold the two worst-performing SMI stocks in December in our portfolios: Logitech (-9%) and Givaudan (-8%).

On the other hand, we were involved in other companies that posted above-average gains: Roche (+7%), Kühne+Nagel and Amrize (both +6%), Novartis (+5%), and Swiss Life and Zurich Insurance (both +4%). But as always, such a monthly picture remains only an interim result. The end of the year is a good time to review what to divest and what to add.

It is important to form your own opinion on the macroeconomy and how the various companies and their business models are performing within it. After Donald Trump’s election, some believed that more jobs would actually be created. The fact is that the number of people in employment has fallen and the labor market is now in a rather precarious situation. The tax reform increased the wealth of the small upper class, which now generates 50% of consumption. The broad middle class is suffering from persistently high inflation and high interest rates on mortgage, credit card, and student loan debt, and a significant portion of the lower class is currently being deprived of health insurance. This has led to a struggle for survival in the world’s largest economy.

As the dollar fell, the price of gold rose. Most recently, an ounce of gold was trading at 3,570 francs, 50% higher than at the beginning of the year. On Wednesday, the dollar temporarily traded at a new low of 0.78. Two further key interest rate cuts could weaken the dollar further in the coming year. The published growth in economic output (GDP) did not seem to have any influence. In the third quarter alone, real GDP in the US is said to have increased by 1.1%, while only +0.8% growth was expected.