STOCK MARKET BLOG JUNE 2023

by the CEO Silvano Grimaldi of the independent asset management company GRIMALDI & PARTNERS AG

MONTHLY REVIEW

The international stock markets ended the month of JUNE inconsistently.

DRIVING FACTORS

The PCE price index for personal consumer spending, which the US Federal Reserve pays particular attention to, rose less strongly than expected compared to the same period in the previous year.
Since the beginning of the year, technology stocks have benefited particularly strongly from hopes that the US Federal Reserve's rate hike cycle will soon come to an end.
Inflation in the USA weakened a little more significantly in May than analysts had expected.
US stocks rebound as inflation data supports bets on a pause in rate hikes
The trend topic of artificial intelligence (AI) plays a major role on the market and is pushing shares in this area.

BURDENING FACTORS

Persistent fears of a longer-term restrictive monetary policy in the USA.
A growing number of profit warnings and an increasingly slowing global economy.

EQUITIES IN FOCUS

SWISS LIFE remains on course for 2023

Swiss Life is sticking to the path it has taken and is continuing to expand the business, which generates fees for the financial group. On the premium side, the Group also grew strongly thanks to the takeover of Elipslife.

In the first quarter of 2023, Swiss Life again earned more money with financial advice, asset management for pension funds, for example, or the sale of investment-linked pension products. Fee income increased by 3 percent to CHF 595 million. Calculated in local currencies, the plus would have been 7 percent.

The group's premium income climbed by 10 percent to CHF 7.53 billion in the first three months, well above expectations. In local currencies, they increased by 11 percent. One reason for this was the life insurance subsidiary Elipslife, which was taken over by Swiss Re.

More new money

Swiss Life has been striving for sustainable growth in fee business for years. In asset management, the insurer of third-party customers (TPAM) received new money of CHF 2.5 billion. A year ago it was 1.2 billion. Assets under management in the TPAM business have increased by around CHF 3 billion to CHF 108 billion since the beginning of the year.

However, the fee income from Swiss Life Asset Managers fell by 12 percent to CHF 212 million. The group justified this with the sale of Livit FM Services AG, negative currency effects and the restrained environment for real estate transactions.

MONTHLY OUTLOOK

The following indicators give reason for optimism for the coming stock market months:

Market breadth has increased, ie stock indices are rising not only because of blue chips, but also thanks to mid-sized entrepreneurs;
Volatility has decreased not only in stock indices but also in interest rate and currency markets;
The global economy is proving more resilient than in previous cycles.

After the advances in the first half of the year, we expect a pause and therefore no big jumps in the summer months.

STOCK RECOMMENDATION: SWISS LIFE