Stock markets are on the rise: Investors expect a rally at the end of the year, especially in Switzerland

class=”sc-29f61514-0 fwWrRV”>

This is as sure as the amen prayer in church: The debate over the year-end rally in the stock markets. It always starts in the fall, and investors and experts speculate whether now is the right time to buy heavily in January and make nice profits.

The year-end rally is more than a myth: November and December are actually stronger than September and October, traditionally considered the stock markets’ weakest months. “The year-end rise is no longer as intense as before, but it can still be observed statistically,” confirms Anja Hochberg (53), head of mixed investment solutions at Zürcher Kantonalbank (ZKB).

Looking at the SMI, the index has actually increased noticeably since the beginning of November. Germany’s leading index Dax has also been in an upward trend for several days. So do the US indices Dow Jones, Nasdaq and S&P 500.

However, this is by no means a guarantee that prices will continue to rise: For example, last year there was no year-end rise; It turns out investors actually hibernated in the fall. We are also in a primary election year: The United States will elect its new president in 2024. This usually means that the year-end rise will start later than the previous year.

Economic concerns and wars

The global economic situation is even more important. And the situation is grim: Inflation is still well above set targets in many places. If interest rates remain high for a while, it will slow down the economy. Added to this are geopolitical uncertainties arising from wars in Ukraine and the Middle East.

Oil prices recently fell to their lowest level since July. This is despite Saudi Arabia and Russia curbing oil production to raise prices. Artificial scarcity does not seem to be enough to offset concerns about the economic crisis.

“Given the difficult economic situation, the year-end rally may be weaker than it has been so far,” predicts ZKB expert Hochberg. The market is currently divided. “Things are getting better for technology companies. Industrial companies are in a difficult situation.”

snow as christmas gift

The Swiss stock market has fallen more than the US and other markets since the beginning of the year. This could now become a trump card: “For many people, it may now be time to add Swiss stocks back to their portfolio,” says Hochberg. This will increase SMI.

In any case, investors should not gamble on the future of the year-end rally. “Even if markets rise on average at the end of the year, this may not be true for all stocks,” warns Hochberg. Depending on individual job numbers, industry expectations and other factors, individual companies may experience a downward trend even if the year-end rally in the overall market becomes a reality.

At the beginning of the new week, SMI moved sideways on Monday. Even if last week’s bullish trend doesn’t continue, this is certainly not the swan song of the year-end rally: then investors can still hope for the Christmas season. The rally is traditionally particularly strong in the last days of the year; For this reason, it is also known as the Santa Claus Rally.

Source :Blick