EMR June 2026
Dear Reader,
TIPS FROM SHARE INDEXES
Not a day goes by without President Trump, or another American political leader making a specific, relevant and/or surprising statement. Just think of the absurd export/import tax proposals, which began with the introduction in the United States of the import of certain goods from Canada, Mexico, and China starting in April 2025. Politicians and the media in general comment on announcements that are economically nonsensical, to say the least, without so far contributing to a promising scenario for inflation and inflation expectations, nor for economic activity in general or for the stabilization of currencies.
At this point we propose to examine recent developments by means of specific stock and currency indices, for the period between April 22, 2024 and May 30, 2025, recalling that the all-time low occurred on April 24, 2025.

Looking at the data – of daily closing values of selected stock indexes – at first glance, one might be somewhat puzzled by the deviations shown in the chart above. Consistently, we believe that it is worth examining what the recent developments disclose. The data confirm that the leading economy, the U.S. market, is governed by growing fear of instability, whether political, social, revelatory or simply schizophrenic actions and reactions. In particular, we accept the following as plausible:
- The period leading up to Donald J. Trump’s inauguration as president of the United States on January 20, 2025, is characterized by significant disproportions among the various indices in terms of levels and trends.
- The phase following Trump’s recent inauguration is even more volatile than the previous one!
- To be able to assess recent developments, we analyze the highs and lows of each phase. The first phase, which runs from April 22, 2024, to January 17, 2025, shows significant developments from index to index, both in terms of explicit levels and respective trends. The developments speak of significant disparities, both in the medium and in the longer term. The trends of most indices indicate sideways fluctuations. The SPI is the best performing index along with the NASDAQ. However, the two indices have reacted differently to the determinants. The SPI rose by 33.1% mainly due to the attractiveness of the Swiss franc, while the NASDAQ’s performance (+24.3 %) has mainly been driven by technological innovation.

The second phase highlights – so far – President Trump’s actions from January 20, 2025 and May 20, 2025. The chart points to specific factors driving each index. Volatility is significantly more pronounced than in the first phase. In addition, the chart shows greater disparities between the indexes before and after March 2025.

OUTLOOK DETERMINANTS
We believe that at this time there are two main factors determining the outlook. The first factor relates to the danger of an economic recession, both in the United States and in other countries, while the second relates to the loss of the triple-A status of U.S. bonds, which exacerbates fears and the cost of refinancing U.S. debt. In this EMR, we ask ourselves what the relevant consequences are that determin the economic outlook and the possible reactions of equity markets.
The recent developments confirm that President Trump is not known for consistent and relevant policy decisions. As we all know, he has announced high taxes on imports of goods, e.g., from Canada, Mexico and China, and many other countries, and then reduced them one after another. Meanwhile, many of his decrees have been changed or cancelled. The reasons for these changes are the real puzzle, according to which we believe both the economic outlook and the focus on U.S. government bond interest rates will change. These changes are and continue to remain deterministic, as we believe they will change both the economic outlook and the deterministic impact on interest rates and inflation and inflation expectations on the position of government bond rates.
The absurd import tariff interventions by various U.S. trading partners, have shifted the focus on economic growth from domestic activity to international trade, with a devastating impact on domestic bond rates and, in due course, on financial instruments. The contextual fact is that Moody’s, until May 19, 2025, has refused to remove the triple “A” rating from sovereign debt, the last of the so-called Big Three! An ominous signal regarding U.S. sovereign debt. This attitude could be interpreted not only as a significant signal to President Trump himself, but also to his Administration.
In a decision that could affect U.S. and global financial markets, Moody’s has downgraded the credit rating of the United States. The reason is the $36 trillion national debt and the Trump administration’s plans for new tax cuts, which are only partially covered by those for health care, ecological change and social welfare. The absurd interventions in the form of import tariffs by various U.S. trading partners have, in our view, shifted the focus of economic growth from domestic activity to international trade, with a devastating effect on domestic bond yields.
As is well known, the “higher” tariffs have a similar effect to an additional tax and primarily hinder personal consumer spending and, with a time lag, business investment and government spending as well as international trade.
PERSONAL POINT OF VIEW
The Trump administration, so far in 2025, has relied on tariffs of imported goods as a means of economic management. Clearly these costs, must be expected to increase consumer and business prices. Therefore, tariffs are expected to have an impact on overall inflation, primarily impacting, in due time, consumer and business fixed investment spending. In the current forecasting exercise this policy requests the exact quantification of how much consumption and/or investment imports contribute to overall inflation, taking the respective possible actions / reactions by the FED into consideration.
Similarly to the consumption spending impact of tariffs, one ought to assess also the import content of different types of equipment used in the U.S. production process as well as the possible repercussions on and of exchange rates. This due to the fact that domestic markups tend to be smaller for investment goods than for consumer goods, making, as one might assume, the import content of the respective costs much larger.
INVESTMENT CONCLUSIONS
Currently we view the following factors as the primary determinants of a most promising investment outlook:
- The whereabouts of inflation is and remains the primary determinant for a promising investment approach. We assume that the inflation trend will continue to have a deterministic influence on imports and exports of consumer and capital goods. Furthermore, we assume that prices for capital goods will remain significantly stronger, i.e. deterministic, than prices for consumer goods exports. We have no doubt that our expectations should play a deterministic role in asset allocation.
- The developments of the trade balance are a further deterministic element of economic activity, particularly regarding consumer and investment.
- While monetary actions and reactions of the U.S. and foreign Central Banks are generally viewed as the most promising and determining anti-inflation factor, we assume, in the current phase, that the primary means to control inflation and interest rates ought to be a return to “political normalcy” by the US President.
- What is definitely trend deterministic is a more coherent policy by the U.S. President, via a limitation of interference in the economic and fiscal policy, including more international cooperation, in other words, less America First policy, and more economic interplay.
Our specific assessment continues to speak, at least for Swiss franc investors, of a significant over-exposition to Swiss instruments and the Swiss franc.
Suggestions are welcome.