Outlook
& news.

By Sébastien Cavernes, CIO Edmond de Rothschild Gestion (Monaco).

Edmond de Rothschild announces the appointment of Eric de Tessières as Group Chief Sustainability Officer. Reporting to Cynthia Tobiano, Deputy CEO, Eric took up his post on 7 April. He will oversee all of the group’s sustainability initiatives, across asset management and private banking. 

•    D. Trump's "Liberation Day" announcements have heightened uncertainty for the markets and the Fed, with a series of tariffs on all imports except Canada (which is already hit by 25% tariffs) and Mexico.
•    Initial estimates forecast a contraction in the US GDP by -1.5% and an inflation increase of +1.5%.
•    In Europe, the euro's appreciation against the dollar and the expectation of competitive prices for Chinese products lacking outlets on the US market could mitigate the impact of these measures

After 30 years of «happy» globalization, the world is a changed place post-pandemic, hit by geopolitical risk and plagued by daily cyber-attacks, with citizens seeking protection. The stock market outlook is particularly attractive for companies exposed to the security theme, which offer investors and the general public the resilience they so desperately need. 

EPISO 6, a fund managed by Tristan Capital Partners and joint venture partner Edmond de Rothschild REIM, have acquired a c.136,000 sqm logistics development in Delta 3 - Dourges (Lille area).

•    Discussions between the U.S. and Russia on implementing the partial ceasefire in the Black Sea are hindered by Moscow's demand for lifted sanctions, maintaining inflation uncertainty related to grain exports.
•    The U.S. plans to impose new tariffs of 25% on countries acquiring Venezuelan oil and auto imports, coinciding with a stricter immigration policy that may impact supply chains and economic growth.
•    In Europe, positive effects from Germany’s stimulus plan are reflected in a slight rise in the IFO business climate index, although mixed manufacturing PMIs indicate ongoing sectoral challenges alongside disappointing services indices.

For almost three years now, AI has single-handedly dominated financial news headlines, generating a flurry of content and analysis. But never has it been so difficult to make a pragmatic assessment of its potential and its advancement.
The confusion today stems from three factors: first, technology is developing at a startling rate. I still remember, back in 2019, reading Architects of Intelligence: The truth about AI from the people building it, a collection of 23 lengthy interviews with the most eminent AI specialists at the time. The recent breakthroughs have undeniably taken the world by surprise - including executives at Meta and Microsoft, and even Elon Musk.

Investors were caught wrong-footed as they headed into 2025: they were expecting corporate tax cuts and deregulation; instead, they are facing a new trade war. Raised tariffs were understood to be bargaining tools to secure concessions, not a priority goal. 

•    In the United States, the Senate, with some Democrat support, managed to avoid a “shutdown” and prolong the budget until September, but some Trump administration decisions are fuelling worries.
•    Germany's spending plan is revitalizing the German and European economies, driving up European stock market indices.
•    The week was also marked by several central bank meetings.

Edmond de Rothschild: assets under management reach an all-time high of CHF 184 billion.

•    Volatility surged this week, resulting in a further decline in US equities. 
•    Eurozone equity markets retreated on the back of uncertainties linked to negotiations in Germany on tax reform and the easing of the debt brake.
•    Long-term European yields continued to climb amid expectations of larger budget deficits, whereas US yields remained stable.

Following the sharp rate hikes of 2022 and 2023, which boosted profitability for banks and insurers but also caused strong liquidity pressures – that led to the spectacular collapse of Credit Suisse - 2024 was a pivotal year for the subordinated financial debt market.
Stronger balance sheets and the prospect of lower interest rates have since rekindled investor interest for these bond instruments. In today’s calmer environment, positive inflows have gradually wiped the losses recorded in earlier years, paving the way for a dynamic 2025.