Factors Influencing the Swiss Stock Market
1. International Economic Situation
The international economic situation, especially the US economy, has recently soured. Sentiment indicators for both consumers and businesses have worsened, which could impact global market development. However, a solid ISM services index has signaled a degree of stability.
2. US Debt Situation and Interest Rates
The US debt situation has proven to be a central theme for the markets. A tepid auction of 20-year US Treasury bonds negatively affected US stock markets. Additionally, the rise in yields on 30-year US Treasury bonds to over 5 percent has also put pressure on the Swiss stock market.
3. Trade Dispute and Negotiations
The preliminary agreement in the trade dispute between the US and China has temporarily created a buying mood, but the long-term effects remain unclear. Tariffs on certain sectors, such as the film industry and pharmaceutical companies, could continue to create uncertainty.
4. Interest Rates and Fed Decisions
Expectations regarding the US Federal Reserve (Fed) are also an important factor. A ‘hold’ decision is expected, with a possible first rate cut in July. These decisions can influence the global interest rate situation and thus also the Swiss stock market.
Impacts on the Swiss Stock Market
- Sell Pressure: The wide sell pressure in nearly all sectors could unsettle investors and lead to caution in investment decisions.
- SMI Performance: The SMI has historically reacted to positive developments such as the rapprochement between the US and China but also to negative factors such as the rise in US Treasury bond yields.
- Sector-Specific Developments: Defensive stocks might come under selling pressure, while cyclical stocks and those related to China could benefit from positive news.
Overall, it is evident that the Swiss stock market is influenced by a variety of global factors, which can have both positive and negative effects.