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Evergreens Insights: Nick Huberty talks about the financial markets - volatility, diversification and geopolitical realities

In this short extract from the “Evergreens by Spuerkeess” podcast, we give the floor to Nick Huberty, Portfolio Manager at Spuerkeess, to explain what is driving the financial markets in 2025. He discusses the mixed performance of equities, the effects of US monetary policy, the challenges of diversification and emerging trends such as commodities and cryptocurrencies. He gives a lucid and qualified analysis on prudence and opportunities.

How would you describe the first half of 2025 in the markets?

Overall, the markets performed well, despite a sharp correction in April. But for European investors, the sharp rise in the euro reduced gains on US equities. What seems to be good news on the US side can effectively be negative in euros.

China’s AI - DeepSeek - sowed doubt at the beginning of the year. What impact has it had?

US technology stocks underperformed in February. Since then, they have rebounded, with a few exceptions such as Apple. Remember that 60% of the performance of the S&P 500 comes from the "Magnificent Seven", led by Nvidia and Meta. In Europe too, gains were concentrated among a few stocks.

Donald Trump’s Liberation Day marked a turning point. What were the consequences?

The tariffs imposed by Donald Trump triggered a sell-off on T-Notes. However, foreign investors have not massively sold US debt. The dollar has weakened, but it is too soon to talk about a new cycle.

What about US monetary policy?

Trump openly criticises Jerome Powell and wants a more accommodative policy. He will not be able to directly influence the Fed, but Powell’s tenure will end soon. His successor could take a more flexible approach, with a huge impact on the US budget.

Inflation remains under control.

Yes, it's surprisingly low. The effects of tariffs are not yet reflected in the figures. The Fed remains cautious, but a more proactive approach would be welcome to avoid having to cut interest rates in haste.

And in Europe?

The euro is having a disinflationary effect, but it is penalising our exports, and this is holding back growth. The ECB has cut rates but I think we could still see two to three more cuts if inflation remains low.

Commodities performed well. Gold, in particular?

Gold has gained more than 20% this year and has doubled in price over the past five years. Silver followed, especially after the announcement from the Russian Central Bank. This reflects a loss of confidence in the dollar and growing interest in safe-haven assets.

What about cryptocurrencies?

They have held up, but only Bitcoin has performed well. It doesn't play a hedging role. In the US, cryptocurrencies have become a legitimate asset class but they are seen differently in Europe.

Finally, what is your forecast for the second half of the year?

One-day spikes in volatility are probably behind us. Volatility could stay high for longer. It will all depend on corporate earnings. If earnings are solid and the Fed cuts rates as early as September, the scenario will be favourable. Otherwise, it will be difficult to exceed current levels.