June 2024
Dear Investors,
The April correction proved to be only a blip in the continuing stock market uptrend. May saw markets rally across the board, in particular in the tech sector (in the US as well as in Europe) and also in Switzerland, where the SMI rallied by an impressive 6.57%. Up to now, Switzerland had been almost flat for the year, which goes to show that our ketchup bottle allegory that we have used repeatedly is still accurate: you know returns are going to come, you just never know when.
As markets keep on climbing the proverbial wall of worry, said worries keep on piling up: two active wars, parliamentary elections in Europe and presidential elections in the United States, inflation still too high but at the same time maybe the global economy is slowing down. The question we get the most is “so what now?”. As in, “this can’t go on, it’s too good to be true”.
Exuberance, it is not. And that’s a great mix, to be honest. If markets keep on going higher and investors remain very doubtful, this is not our modern day 1999, far from it. This is not 2021, either. Yes, cryptocurrencies are up quite strongly, but nobody cares. Yes, Roaring Kitty is back tweeting about GameStop, but it’s not going well.
Simply put: stocks are going up because companies keep on churning out pretty good earnings. As long as this remains the case, whatever the macro issues (and we think there is less than meets the eye there), markets should keep plugging along.
Best regards,
Your CaridaB Group Team
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