Summary

1. Trumpcession incoming? We believed that President Trump would follow US growth-positive policies. We expected a game of carrot and stick. But we have seen only sticks, increasing the risk of a severe US growth slowdown on record policy uncertainty. Downgrade US equities to neutral

2. The Lagnificent 7– Expectations for the Magnificent 7 have been too high as fundamentals couldn´t keep track with valuations. The Mag 7 stocks have underperformed since December, a risk we have been flagging for some time already. We continue to prefer SMID cap and equal-weighted US stock  exposure.

3. Europe: The market seems to have priced a Goldilocks scenario with high investment and a lasting solution to the war in Ukraine. While we acknowledge that the stars for a sustainable growth uplift are aligning, we remain wary of short-term headwinds from high expectations and tariff threats. We thus remain neutral (for now).

4. Remain positive on equites – Any worsening of the tariff drag on growth or evaporation of hope for a Ukraine-Russia ceasefire would warrant a more cautious asset allocation stance.

5. Sectors: in the US, we downgrade US Consumer Discretionary and US Information Technology from Neutral to Negative. In Europe, we increase our cyclical bias further by upgrading European Chemicals from Negative to Neutral. We downgrade European Real Estate from Positive to Neutral.