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The market at a glance: Taxman
February may be shorter than other months, but it certainly didn’t hold back on news.
Let’s start with the markets. It was the first full month of Trump’s presidency, and the new president wasted no time laying all his cards on the table—tariffs, immigration policies, business moves, you name it. What is more intriguing is how financial markets reacted. More on this in our market review.
We've launched two features to help your Swiss Francs grow: savings accounts with competitive rates up to 1.0%—far above Switzerland's 0.2% average—and new ETF savings plans, including Global + Cryptos options. Act before potential rate changes in March!
Enjoy the read!
The market at a glance: Taxman
Song of the month: “Taxman" by The Beatles
"If you drive a car, I'll tax the street..." Never has this line felt more fitting than at the start of 2025. As Donald Trump kicks off his presidency with his unmistakable style, the economy and taxation are once again front and center. New tariffs, aggressive tax reforms, threats of trade retaliation—it almost feels like "Taxman" by The Beatles was written for the occasion.
The US president has a knack for capturing the attention of the media and world leaders with his "America First" policies. However, not everything seems to be going according to plan.
In recent weeks, investors appear to have shifted their focus, rediscovering potential opportunities in the 194 other countries around the globe and the 95.8% of the world's population residing in them. Let's dive deeper into this shift.
Key takeaways
Donald Trump kicked off his presidency with his unmistakable style, bringing the economy and taxation back to the forefront. However, the market's attention was elsewhere.
In the equities markets, the leaders of late 2024 continue to be the laggards at the beginning of the year, and vice versa. Several factors explain this shift.
February was a good month for bond markets, with central banks still calling the shots. Swiss savers are now preparing for the next Swiss National Bank meeting. Will we say goodbye to earnings on savings accounts?
Bitcoin's plunge was as brutal as gold's ascent, and the dollar lost ground.
Overall, while markets are a bit more volatile, we see opportunities arising from these shifts.
What happened with equities
On paper, nothing suggested that in February:
the European and Swiss markets would continue to outperform the US market (+3.3% and +3.2% vs -1.4%).
Chinese tech stocks would crush the Nasdaq (8.45% vs -2.7%).
Japanese markets would drop by -6.5%.
Indeed, with Donald Trump's threats to impose new tariffs on imports from nearly every country on the world map, the odds seemed to favour the US economy. Investor’s love for US tech stocks also appeared unconditional.
So, what happened?
As we pointed out in previous newsletters, it seemed that investors were looking a bit too much in one direction, forgetting that:
First, tariffs work both ways and can affect those who set them. And their implementation doesn’t happen overnight: delays, grace periods, intimidations, negotiations, circumventions... The markets may have taken the American president's statements a bit too literally, forgetting that, for him, tariffs have always been a means of pressure rather than an end in themselves.
Second, it was naive to think that Silicon Valley’s AI advantage was forever. DeepSeek made a dramatic entrance, promising free, universally accessible artificial intelligence capable of running on less powerful machines. With its advent, Silicon Valley trembled, and at least two paradigms were overturned. The first: human intelligence came to the rescue of artificial intelligence. DeepSeek is, above all, an engineering feat. The second: a return to the open-source principle. Who would have imagined that American university professors, unable to afford $40,000 NVIDIA chips, could now rely on a Chinese model to continue their AI research? Let's not get carried away. Thinking that Silicon Valley has no future would be as naive as believing it was untouchable.
Third, when one seeks attention, they inevitably receive it. A newly elected president often promises a wind of renewal and, to impose their program, does not hesitate to discredit their predecessors. But by overdoing it, the risk is to draw investors' attention to problems that had previously gone unnoticed: the health of the American job market, boosted by administrative jobs, the implications of a global reserve currency for the local economy, an uncertain fiscal future... to name just a few examples.
Let’s remember that in the equity markets, the best opportunities often arise when the waters are muddled. In the end, what is preferable from an investment perspective? An economy criticised like Europe or China, where every problem – even those that aren't – is already on the table? Or an economy that seems solid on the surface but whose flaws have not yet been thoroughly scrutinised?
What happened with bonds
February 2025 was a significant month for the bond market, with corporate bonds holding strong and central banks adjusting to shifting economic conditions.
Investor appetite for yield remains intact, as evidenced by the performance of lower-grade or "junk" bonds, with their yields staying around 7%.
Investment-grade corporate bonds also performed well, with the Bloomberg U.S. Aggregate Bond Index rising 0.53%, indicating confidence in corporate credit quality despite economic uncertainty.
Central banks played a major role in shaping sentiment. In the U.S., despite public calls from Trump, the Federal Reserve held interest rates steady at 4.25%–4.50%, pausing its rate-cut cycle from 2024. This cautious approach, as policymakers weigh persistent inflation against signs of slowing economic growth, contrasts sharply with Trump's style and is likely to create further friction at some point.
In the Eurozone, all eyes are on the ECB’s expected rate cut in March, set to lower the deposit facility rate to 2.65%. This move comes amid economic stagnation, with President Christine Lagarde highlighting weak momentum, especially in manufacturing. Lower inflation has given the ECB more room to ease policy and support growth.
The key question for this month is whether the Swiss National Bank will cut interest rates once more too, potentially pushing earnings on savings accounts closer to 0%. We would be both surprised and unsurprised if this happens. Surprised because there are no apparent reasons for the SNB to do so, but not surprised because they have hinted at it. Savers: it's time to make your final adjustments for the year.
What happened with commodities, currencies, and digital assets
Gold was on fire in February, hitting new all-time highs thanks to growing trade tensions and tariff threats from the U.S. By February 24, prices soared above $2,950 per ounce, inching closer to the big $3,000 milestone. Analysts are now calling for $3,100 by the end of the year. What’s fuelling this rally? Central banks, particularly in China and India, are stockpiling gold as a hedge against economic and geopolitical uncertainties.
On the EUR/CHF front, things were pretty calm, with the exchange rate holding steady throughout February. But over in the USD/CHF market, things got a bit more interesting. The U.S. dollar lost nearly 2% against the Swiss franc, dragged down by rising instability in the U.S. and a drop in 10-year Treasury yields, making the greenback less attractive to investors.
February was brutal for Bitcoin, with prices plunging 27% from their all-time high of $109,000, set just before Trump’s inauguration. By the end of the month, BTC was struggling below $80,000, marking its worst February since 2014.
So, what went wrong? A perfect storm of bad news hit the crypto market: Trump’s trade policies raised fears of a full-blown trade war, pushing investors away from risky assets; the U.S. government is preparing strict new rules on stablecoins, making them less attractive for crypto traders; and a massive hack on Bybit resulted in $1.5 billion in losses, causing Bitcoin to tumble from $99,000 to $95,000 in a matter of hours. But hey, ups and downs are all part of the cryptocurrency investment journey.
To conclude, this start of the year in the stock market is the inverse reflection of the end of last year. Some expectations have been disappointed, but with a certain enthusiasm, we are also rediscovering what no longer excited anyone. And it is in these shifts that the most beautiful opportunities are found. It's up to us to seize them.
Savers: Secure interests before it’s too late
The upcoming Swiss National Bank meeting could bring another round of interest rate cuts, potentially reducing the yields of most savings and cash accounts back down to 0%.
3 tips to protect your savings:
Choose your savings account carefully: Not all saving account are created equal, and the more you save, the less you generally earn on your savings. At Alpian we offer some of the most competitive rates with limited string attached.
Lock in guaranteed interest: Secure your savings now in an account offering guaranteed returns. For instance, Alpian’s Booster offer until end of March provides enhanced interest rates—but only until the end of the year.
Consider investing: Look beyond traditional savings accounts. Investing can offer potential for higher returns, helping your wealth grow even when interest rates are low.
Cryptos in ETFs saving plans?
Each month, we see more clients adopting our ETF savings plans. Starting from just CHF 2,000, you can step into the world of investments and benefit from the expertise of our investment team.
Our plans come in various options, allowing you to decide where your money goes. Whether you prefer to invest in Swiss companies, international companies, or prioritise ESG factors, we have a plan for you.
A lesser-known fact is that we are one of the few asset managers in Switzerland also offering diversified ETF plans that include a slice of crypto for those who want to embrace the digital future while maintaining exposure to traditional assets.
We have just launched two new Global + Crypto plans, with 2.5% and 5% exposure to crypto markets, respectively, designed for investors with a more balanced risk profile. Book an appointment with our wealth advisors for more information.
