Recent days have brought significant volatility to financial markets, primarily due to growing concerns about the US economy and the potential repercussions of President Trump's tariffs policies on the global economy. This uncertainty has led to a nearly 10%1 decline in the Nasdaq Index since the start of the year, prompting a rotation away from US mega tech stocks towards European and Chinese equities.

In Europe, optimism is rising, driven by proposals for a ceasefire in the Russia-Ukraine conflict and a new defence spending plan following the German elections. This positive sentiment has propelled the German DAX and the French CAC 40 to gains of approximately 14% and 9% year-to-date2, respectively, while the euro has strengthened against the dollar, moving towards a target of 1.10.

The bond market is also experiencing notable shifts, with European yields surging and US rates declining amid growth concerns. This divergence underscores the importance of an active duration approach in fixed income investments.

As we navigate this environment of uncertainty, maintaining a balanced and diversified portfolio is crucial. We see attractive opportunities in European investment-grade credit, and commodities like gold remain in demand for diversification purposes.

Overall, investors should consider broadening their investment horizons, moving away from expensive segments towards more attractively priced areas.

EU and Chinese stocks outperforming the US stocks
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1 As of 10 March 2025
2 As of 10 March 2025

Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 13 March 2025. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. 

Date of first use: 13 March 2025

Doc ID: 4314928