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AlphaSwiss Partners Market Update – November 2016


Market update
November 30th, 2016

Mr. Trump has been elected to become the 45th President of the United-States of America.

His goal is to put American’s interest first in all aspects of his mandate, create more jobs and bring growth back to 4%.

This is an ambitious goal, to say the least, but we have to give him the benefice of doubt, not only because a regime shift is probably needed, but also because if he succeeds, it will benefit all. Numerous details will have to clarify over time, such as how he will finance his program, what the impact will be on the US deficit, what attitude is he going to adopt with his trading partners, etc.

In terms of investments, new trends are starting to emerge: rotation from bonds into equities, a shift in sectorial preferences, or Emerging Markets’ outflows.

Some needs to be confirmed, but others will stay with us and force us to adjust our positioning.

Please find attached our complete analysis: AlphaSwiss Partners Market Update – November 2016

AlphaSwiss Partners Market Update – September 2016


Market update
October 3rd, 2016

September was all about central banks.

As expected the Fed stayed on hold, the ECB and the BoE took advantage of relatively calm market conditions to mark a pause, while the BoJ attempted to persuade investors it was capable to support activity and reach its inflation target by twisting rather than increasing its asset purchase program.

We view the BoJ action as a recognition that the central bank is getting short of ammunition and rather counting on fiscal stimulus by the government. This reinforces our conviction that the time to go back into Japanese assets has still not come.

For the rest, major central banks have yet again shown their market friendly commitment. With regards to the Fed, we could argue that Mrs. Yellen is missing the train, and that it could have negative consequences over time, but from an investment standpoint, this dovishness continues to support yield generating investments/proxies.

Please find attached our complete analysis: AlphaSwiss Partners Market Update September 2016

Fed’s Lockhart Urges Serious Discussion of Rate Hike This Month


Federal Reserve Bank of Atlanta President Dennis Lockhart repeated his call for a “serious discussion” about raising interest rates at the U.S. central bank’s meeting later this month, even after some recent disappointing economic indicators.

“Notwithstanding a few recent weak monthly reports — from the Institute for Supply Management, for example — I am satisfied at this point that conditions warrant that serious discussion,” Lockhart said Monday in Atlanta.

The policy-setting Federal Open Market Committee meets Sept. 20-21. Recent comments from committee members point to a division over the need to raise interest rates. Fed Governor Daniel Tarullo on Friday repeated a cautious assessment of the economy, while Boston Fed President Eric Rosengren argued there was a reasonable case for gradual tightening.

Investors will also listen closely to remarks at 1:15 p.m. New York time from Governor Lael Brainard, who has argued for patience in raising rates, for final clues before the central bank enters its traditional self-imposed quiet period before a meeting.

Minneapolis Fed chief Neel Kashkari, in an interview on CNBC Monday, said he saw no urgency to act and preferred to see more upward movement in core inflation.

Full story at: Fed’s Lockhart Urges Serious Discussion of Rate Hike This Month

Apple’s Irish Tax Bill May Run Into Billions of Euros


Apple Inc. is facing a potential tax bill running into billions of euros, with the European Union poised to release a finding into the company’s dealings in Ireland as soon as Tuesday, according to people familiar with the situation.

The European Commission decision is expected to say Ireland provided the iPhone maker with illegal aid through a sweetheart deal in return for creating jobs in the nation, the people said on condition of anonymity because the details are confidential. Ireland has vowed to fight any adverse finding.

Such a ruling might heighten tensions between Europe and the U.S. over taxation policies, with the U.S. having already complained that Europe is unfairly targeting American companies and threatening global tax reforms.

In preliminary findings in 2014, European competition authorities said Apple’s tax arrangements were improperly designed to give the company a financial boost. There’s a range of estimates on how much Apple might have to pay. In a worst-case scenario, Apple may face a $19 billion bill if the government ultimately loses and is forced to recoup tax from the company, according to JPMorgan Chase & Co. analyst Rod Hall. The Irish Times reported earlier on Monday that the figure might not be much more than 100 million euros ($112 million), although it later revised its estimate upwards.

The European Commission declined to comment on a decision that’s still pending or on the timing of its announcement.
Apple said it had nothing to add to previous statements rejecting suggestions it received selective treatment from Irish officials. The ministry declined to comment.



AlphaSwiss Partners Market Up-date – June 2016


Market update
June 30th, 2016

So UK voters decided to leave the EU.

Uncertainties over the implications of this decision triggered an important deterioration of risk sentiment and market conditions.

In the two days following the vote, the Sterling lost an impressive 12%, down from 1.49 to 1.33. European equities declined more than 10%, with peripheral down more than 15%, and banks lost more than 20%. US markets unsurprisingly outperformed, down “only” 5% to 6%, comforting us with our current overweight in the region. Credit spreads widened but probably more due to worsened liquidity. Safe haven such as core rates, the USD, the JPY, the CHF and gold rallied strongly.

Looking ahead, a lot will depend on the reaction of European authorities. Not only because of the economic negotiations that will have to take place with the UK in the months ahead, but also regarding the inevitable change in economic, fiscal and social policies that need to be undertaken in the region.

What a challenge, but what an opportunity!

Please find attached our complete analysis: AlphaSwiss Partners Market Update June2016

Brexit Means Draghi’s ECB Seen as Euro-Area Rescuer Again


Frexit. Quitaly. The names are amusing, the reality would be anything but.

In the days since the U.K. voted to leave the European Union, the fact that commentators are scanning for the next country to worry about illustrates the existential crisis that the European project is having. For the euro area — the 19-nation section of the EU that has pursued the deepest integration — a dangerous loss of economic momentum is on the way, according to a Bloomberg survey.

Even with the economy entering its 14th quarter of expansion, unemployment is still above 10 percent and populist parties are on the rise from Germany to the Netherlands. Slower growth risks pushing political positions further toward extremes, yet questions still hang over issues including Italy’s failing banking system and reform of the bloc’s budget rules, and the European Central Bank looks like the only institution willing to act.

“Populism is a real threat to cohesion across Europe now, and a weaker growth environment makes solving the issues more difficult,” said Philippe Gudin, the Paris-based chief European economist at Barclays Plc. “To get out of this negative feedback loop we need a very strong message of confidence to the business sector on the future of Europe. The answer isn’t there yet.”

The ECB forecast economic growth for the euro area of 1.6 percent in 2016 and 1.7 percent in 2017 — but it did so before the June 23 Brexit vote. The next update is scheduled for September.

Economists in the survey said the fallout from Brexit will shave off 0.1 percentage point of growth in gross domestic product, 0.3 percentage point in 2017 and 0.15 percentage point in 2018. That’s about 59 billion euros ($66 billion) of lost output.

Full story at: Brexit Means Draghi’s ECB Seen as Euro-Area Rescuer Again