EMR November 2026

Dear Reader,

The elections in the USA have, not really surprisingly, called for a significant return to political normalcy. In the short term, we expect some political noise from the outgoing president. The return to normalcy will require significant engagement by the Republican Party, rendering the noise by MR TRUMP significantly less influential.

More important will be the actions and reactions of the Republicans. Consequently, we bank on significant noise from the outgoing president.

The actions of the Democratic president and members of Congress will be deterministic as well.

Consequently, we bank on a rather fast return to congressional normalcy. No doubt, the stock market ought to experience a rather fast return to more daily normalcy. We do expect that neither the majority of the Democrats nor a significant number of Republicans might be interested in continuing on the path, prior to the recent elections in favour of a significantly more constructive policy.

This should propel the US Market, and in due time also the world markets.

THE SITUATION

Examining the various commentaries on future investment prospects, we face a real puzzle. In other words, we have to select a promising starting point. To us, it looks promising to start with inflation as the primary determining factor, followed by the reaction of primary market players (i.e., governments) and interest-rate adjustments, to define a suitable view of economic activity. To explain what we, contextually, view as deterministic, let us point to the whereabouts of a selected list of equity indexes; see the following chart.

For a pertinent comparison we show the developments of specific equity indexes for the recent days.

The graphs above highlight two specific sub-periods of the same equity indexes, which, after a thorough examination, tell us something about productivity in both the short and long term.

At first sight, the first chart is indeed intriguing, isn’t it, both in terms of the overall performance and the two discernible main subperiods.

The first subperiod covers the period from 02.01.2020 to 01.01.2023, followed by a sizeable, short correction phase, and subsequently followed by a significantly drifting-apart performance, both in terms of trend and magnitude. The overall best-performing indexes – see longer-term chart – have been the NASDAQ, closely followed by the NIKKEI and the S&P500 indexes. The worst performers over the same period have been the SPI, followed by the CAC and the FTSE100 indexes.

The developments shown in the equity indexes somehow explain why, on Sept. 16, 2026, the Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75% to 4%, representing its first increase since 2023. Updated projections point to the possibility of another rate increase this year. FED Chairman Kevin Warsh explained that recent economic reports showed the economy, including the labour market, as strong. Nevertheless, inflation remained above the Central bank’s target range. Further, he added that tensions in the Middle East also contributed to the FED’s decision.

What we might deduce from the performance of the portrayed equity indexes, as well as the EUR/USD rate, is the real question, is it not? All the implicit consequences point to forecasting difficulties, i.e., regarding comparability with past periods. In other words, the pertinent knowledge of the determinants is a tricky requirement. Let us stress that the recent announcement by the FED on Sept. 16.2026 approved its first increase in more than three years, while indicating that another increase might follow, as part of an effort to combat inflation, driven mostly by spiralling oil prices and other factors.

CURRENT ASSESSMENT

Looking back at the charts above, we see dramatic disparities in the size of the developments across the phases. Growth performance has been significantly larger since January 2023 than in the preceding phase. In addition, the disparities in the second phase are significantly larger, both concerning the specific trend as well as the respective de facto changes. The growth performances of the NASDAQ and the NIKKEI outperformed all other indexes, did they not? Astonishing, indeed, is the performance of the Swiss indexes: SMI and SPI in CHF. In addition, it is worthwhile to recall that the growth performances of the second phase vary significantly more as compared to the previous period/phase.

Overall, we might ask ourselves: what have been the factors driving both monetary and fiscal policies?

A conclusion we might draw from the data in the charts is that the trends are rather synchronous, while the actual disparities vary significantly more from one equity index to another, suggesting that the short-term trend might be useful for short-term trading. In addition, investors ought to examine the real developments, significantly more than the arguments of politicians, given the disparate developments over time. What astonishes us most are the pertinent commentaries by politicians as compared to the de facto developments.

Productivity growth is currently one of the most challenging economic aspects, while one of the biggest decision-making errors concerns the incorrect assumption of relatively comparable productivity rates from country to country, mainly as a result of policy-driven arguments. What is clear is that there is no doubt at all that technological innovation is, or can, or might be significant, while differing from country to country and thus from one equity index to another. It is insufficient to measure production mainly in terms of working hours – just think of the rise in the price of crude oil and coherent currency adjustments.

HOW TO BENEFIT IN A CHANGING ENVIRONMENT?

From an investment perspective, we are forced to make the following assumptions:

• Short- to medium-term, the overall rate of inflation is expected to be higher than generally anticipated by most analysts.
• Economic growth could be significantly lower than currently anticipated by many analysts, requiring a continuous reassessment from country to country, as well as from currency to currency, in which one wants to be invested.
• In addition, in the short to medium term, we expect inflation to be higher and economic growth to be significantly lower, requiring a continuous assessment of stocks, bonds and currency selection.

A further specific factor which we expect to determine the short-to-medium-term investment policy outlook refers to the expected weightings made by policymakers and investors. We believe that overall, what will matter most ought to be the specific focus on the three factors determining productivity in general, as defined either by hours worked, or by energy productivity, and/or by capital productivity.

In this context, we would appreciate knowing which order you, dear reader, think is most promising. Thank you in advance for your specific statement.