September 2026 Market Outlook | “Gimme Shelter” in an Increasingly Fragile Market

September 2026 Market Outlook 

 

Each month, Pierre Mouton shares his perspective on global financial markets through the lens of a song that captures the prevailing market mood. Following August’s discussion of investor optimism in the face of rising bond yields, September’s market environment felt increasingly defensive. Inspired by The Rolling Stones’ “Gimme Shelter”, this month’s market commentary explores the growing concentration of market leadership, the challenges facing traditional safe havens and the implications for investors navigating a more fragile backdrop.

“Gimme Shelter” – The Rolling Stones, 1969

“Ooh, a storm is threatening…”

In a more fragile market backdrop, September made the message unmistakably clear: investors spent much of the month searching for shelter. Global markets were increasingly defined not by broad participation, but by tentative flights toward perceived safety and a growing concentration of leadership.

The gap between the capitalization-weighted S&P 500 and its equal-weighted counterpart widened further, underscoring how dependent market performance has become on a relatively small group of mega-cap companies. While the largest names continued to attract flows, the average stock struggled to keep pace. The result was a market that appeared healthy from afar but revealed increasing fragility upon closer inspection.

Traditional Safe Havens Fail to Deliver

Traditional defensive assets offered little protection during the month.

Long-duration government bonds, which historically serve as a refuge during periods of uncertainty, came under renewed pressure as yields moved higher. Gold, another classic safe haven, also disappointed. Despite ongoing geopolitical tensions and an uncertain macroeconomic environment, the precious metal retreated as higher real yields and a firmer U.S. dollar reduced its relative appeal.

Within equities, traditional defensive sectors such as Consumer Staples, Healthcare and Utilities failed to provide meaningful protection and ended the month in negative territory. September’s lesson was therefore not simply about risk-off positioning. Rather, it was about the scarcity of genuine shelter in a market where concentration is rising, bonds are struggling, gold is retreating and investors are increasingly forced to seek refuge in only a limited number of places.

As Gimme Shelter reminds us, when “the storm is threatening”, the search for protection can become the dominant investment theme, but shelter is not necessarily found where most expect.

Market Performance in September

The MSCI World lost 1.7% in September, while the S&P 500 declined 0.5%. Europe proved weaker, with the Stoxx 600 falling 2.5%, while Japan’s Topix slipped 1.2% and the MSCI Emerging Markets Index declined 0.8%.

The notable exception was the technology-heavy Nasdaq, which gained an impressive 3.2% despite the broader market weakness. Unsurprisingly, Growth outperformed Value (-0.2% versus -2.4%), illustrating once again the dominant role of a small group of growth-oriented companies in driving market returns.

Rising Bond Yields Continue to Pressure Markets

Developments in other asset classes played a significant role in shaping September’s investment outlook.

Ten-year government bond yields moved sharply higher across major markets: +26 basis points in Germany, +53 basis points in the United States and +68 basis points in France. French government bonds attracted particular attention, with the spread versus Germany exceeding 120 basis points for the first time since the 2011-2012 eurozone debt crisis.

Commodities delivered mixed performances. Oil prices advanced again, with WTI crude rising 5.4%, while Gold declined 6.2%, pressured by higher yields and continued U.S. dollar strength.

Credit markets also weakened modestly, with the iTraxx Crossover index down 0.8%. In contrast, cryptocurrencies performed well as Bitcoin gained 6.1% over the month.

Where Investors Found Shelter

Beyond the resilience of the Nasdaq, the only truly reliable shelter in September was cash in U.S. dollars.

The greenback strengthened against most major currencies, while yields on USD money market instruments remained close to 4%, providing investors with both stability and attractive short-term income. In a month characterised by narrowing market leadership and weakening traditional safe havens, cash proved to be one of the few places where investors could genuinely find protection.

 

Previous Market Outlooks

 

This content is provided for information purposes only and does not constitute investment advice, an offer, solicitation or recommendation to buy or sell any financial instrument or investment product.

The views and opinions expressed are those of NS PARTNERS SA at the date of publication and may change without notice. References to specific securities, sectors or market developments are provided for illustrative purposes only and should not be interpreted as investment recommendations or investment research.

Past performance does not predict future returns. The value of investments and the income derived from them may fluctuate and investors may not recover the amount originally invested. Investments involve risks, including possible loss of capital.

References to market indices, benchmarks or other measures of relative market performance are provided for information purposes only. NS PARTNERS SA makes reasonable efforts to ensure the accuracy of the information contained herein but provides no warranty or representation as to its completeness or accuracy.

Some entities of the NS Partners Group or their clients may hold positions in the financial instruments mentioned or may act as advisor to related issuers.

This content may not be distributed or used in any jurisdiction where such distribution or use would be contrary to local laws or regulations. Additional information is available upon request.

© NS Partners Group

August 2026 Market Outlook: What a Fool Believes

August 2026 Market Outlook: What a fool believes

“What a fool believes” – Michael McDonald, the Doobie Brothers, 1978

August 2026 was another month in which investors appeared willing to suspend disbelief. Equity markets continued to push higher, supported by exceptional corporate earnings, resilient economic activity and relentless enthusiasm around artificial intelligence. Profit margins remain close to record highs, and consensus expectations still point to another year of robust earnings growth.

Yet beneath the surface, an important warning signal is flashing. Government bond yields have continued to rise, reflecting a world in which fiscal deficits remain elevated, debt issuance is accelerating and investors are demanding higher compensation for long-term lending. Historically, rising risk-free rates have eventually imposed a valuation discipline that equity markets cannot ignore indefinitely.

The current profit cycle has been remarkable, but history teaches that no cycle lasts forever. Competition increases, margins normalize and economic gravity ultimately reasserts itself. Today’s market narrative assumes that productivity gains, technological innovation and strong corporate pricing power will continue to offset higher financing costs. That may prove true for some time. However, believing that earnings can compound indefinitely while the cost of capital rises steadily requires an increasing degree of faith; As Michael McDonald magnificently reminds us in What a Fool Believes, “No wise man has the power to reason away” realities that eventually assert themselves.

“What a Fool Believes” comes to mind, indeed. The song tells the story of someone convinced that a past reality still exists, despite evidence to the contrary. Investors should be careful not to fall into a similar trap. Exceptional profit growth can persist longer than expected, but the combination of stretched valuations and rising government bond yields has rarely been a recipe for permanent market euphoria.

For now, the music is still playing. But prudent investors know that the most dangerous assumption in financial markets is that today’s extraordinary conditions will last forever.

The MSCI World rose 2.5% for the month, with all regions up, notably Emerging Markets and Japan (+3.2% and +3.8% respectively); Growth and Value performed evenly, but the second half of the month saw market concentration increase significantly.

If US 10 year yields barely moved for August, European Government bonds yields were on the rise, notably for France, whose spread versus Germany teeters with levels not seen since the 2012 eurozone crisis, but does not reach panic levels, for now. Gold rebounded sharply (+9.6%) as well as Bitcoin (+25.4% in August, but still down 10% year to date). Oil added 1.3% for the WTI, adding to the strong return provided year to date by most commodities; to wit, the CRB Index was up 6.6% in August and is now up 37.4% year to date.

 

This content is provided for information purposes only and does not constitute investment advice, an offer, solicitation or recommendation to buy or sell any financial instrument or investment product.

The views and opinions expressed are those of NS PARTNERS SA at the date of publication and may change without notice. References to specific securities, sectors or market developments are provided for illustrative purposes only and should not be interpreted as investment recommendations or investment research.

Past performance does not predict future returns. The value of investments and the income derived from them may fluctuate and investors may not recover the amount originally invested. Investments involve risks, including possible loss of capital.

References to market indices, benchmarks or other measures of relative market performance are provided for information purposes only. NS PARTNERS SA makes reasonable efforts to ensure the accuracy of the information contained herein but provides no warranty or representation as to its completeness or accuracy.

Some entities of the NS Partners Group or their clients may hold positions in the financial instruments mentioned or may act as advisor to related issuers.

This content may not be distributed or used in any jurisdiction where such distribution or use would be contrary to local laws or regulations. Additional information is available upon request.

© NS Partners Group

July 2026 market outlook: The Message

July 2026 Market Outlook: the message

“The Message” – Cymande, 1972

In the spirit of Cymande’s 1972 funk classic The Message, markets spent July delivering a clear signal that investors would have been wise to heed. “Don’t watch where I go”, sings Cymande, conveying a message of shared wisdom, measured steps and the need to chart one’s own course rather than blindly following the crowd. A similar tone echoed across financial markets last month.

Semiconductor stocks, the high-flyers of the AI-driven rally, sent the loudest warning, falling roughly 20% on average. It was the group’s worst July performance in more than two decades. Several names that had gained more than 100%, and in some cases over 300%, year to date suffered sharp pullbacks, with declines reaching as much as 45%. Memory-related and equipment companies were particularly hard hit amid concerns around valuations, potential oversupply and the durability of the AI infrastructure boom.

Investors had already started rotating, at least partially, in June, trimming positions in the most extended names. The market was not, and is not, rejecting the long-term AI narrative. Rather, July’s price action signalled a renewed insistence on discipline around valuation and timing. It was not a call for panic, but for greater selectivity, respect for valuations and a willingness to “make your way” with more care instead of simply following prior momentum.

The MSCI World still gained 0.5% for the month, but beneath the surface the divergence between styles was striking. Growth declined 2.5%, while Value advanced 3.5%. The same pattern was visible across major equity indices. The S&P 500 slipped only 0.1%, whereas the Nasdaq fell 6.6%. Europe’s lower exposure to Technology proved beneficial, with the Stoxx Europe 600 gaining 1.2%. Meanwhile, the MSCI Emerging Markets Index lost 3.3%, weighed down by the sharp decline in Asian memory stocks. Japan finished the month broadly unchanged despite a strong Yen, which appreciated 3.2% against the US dollar.

Against a backdrop of renewed tensions in the Middle East, oil prices surged 21.5%, rekindling inflation concerns and contributing to a broad rise in government bond yields. The US 10-Year Treasury yield increased by 27 basis points, while Germany’s 10-Year Bund yield rose by 35 basis points. Gold was largely unchanged during the month and remains down 6.4% since the start of the year.

 

This content is provided for information purposes only and does not constitute investment advice, an offer, solicitation or recommendation to buy or sell any financial instrument or investment product.

The views and opinions expressed are those of NS PARTNERS SA at the date of publication and may change without notice. References to specific securities, sectors or market developments are provided for illustrative purposes only and should not be interpreted as investment recommendations or investment research.

Past performance does not predict future returns. The value of investments and the income derived from them may fluctuate and investors may not recover the amount originally invested. Investments involve risks, including possible loss of capital.

References to market indices, benchmarks or other measures of relative market performance are provided for information purposes only. NS PARTNERS SA makes reasonable efforts to ensure the accuracy of the information contained herein but provides no warranty or representation as to its completeness or accuracy.

Some entities of the NS Partners Group or their clients may hold positions in the financial instruments mentioned or may act as advisor to related issuers.

This content may not be distributed or used in any jurisdiction where such distribution or use would be contrary to local laws or regulations. Additional information is available upon request.

© NS Partners Group

June 2026 market outlook: Space Oddity

June 2026 Market Outlook: Space Oddity

“Space Oddity” – David Bowie, 1969

The financial universe experienced a stunning, gravity-defying liftoff this month as investors piled in for the highly anticipated SpaceX IPO on the Nasdaq. The blockbuster debut launched at an interstellar $135 a share, raising a massive $75 billion. Consequently, the company’s valuation instantly soared toward the $1.77 trillion mark, representing a true giant leap for Wall Street.

“Check ignition and may God’s love be with you.”

Chaotic back-and-forth discussions about the end of the war in the Gulf have triggered significant volatility across various asset classes and currencies. On the Fed side, newly appointed chairman Warsh announced the creation of five specialized task forces to review and reform the Fed’s core operations. He left key rates unchanged, refused to submit his own interest-rate forecast for the Fed’s quarterly Summary of Economic Projections (the “dot plot”), and decided to shift to Data-Dependent Transparency. Quite a busy first month for the newcomer!

While the monthly performances posted by most major equity markets do not exhibit sharp moves, a lot happened beneath the surface, with wide variations and rotations across asset classes and investment styles. The MSCI World shed 0.8%, the S&P 500 dropped 1.1% and the MSCI Emerging Markets fell 1.7%, while the Stoxx 600 Europe rose 2.5%, and the Japanese Topix gained 1%. It is important to note that all these numbers are expressed in local currencies, because the US dollar has shown strength in almost all crosses, for example versus the euro or the yen (+2.1% for both).

With the large easing in Middle East tensions, Oil cratered 20.4%, dragging down the broad CRB Commodities Index, which fell 7.1%; this impacted equity indices, as commodity-related stocks slumped. Despite that, Growth underperformed Value during the month, mainly due to the very poor return recorded by the Magnificent Seven (-8.8% on average).

Interest rates were stable in general, and Credit did well (+1.2% for the iTraxx Crossover); Gold fell for a fourth consecutive month (-11.3% in June, bringing its year-to-date return to -6.8%), while Bitcoin nosedived by 20.4% and is now down 33.3% for the year.

 

This content is provided for information purposes only and does not constitute investment advice, an offer, solicitation or recommendation to buy or sell any financial instrument or investment product.

The views and opinions expressed are those of NS PARTNERS SA at the date of publication and may change without notice. References to specific securities, sectors or market developments are provided for illustrative purposes only and should not be interpreted as investment recommendations or investment research.

Past performance does not predict future returns. The value of investments and the income derived from them may fluctuate and investors may not recover the amount originally invested. Investments involve risks, including possible loss of capital.

References to market indices, benchmarks or other measures of relative market performance are provided for information purposes only. NS PARTNERS SA makes reasonable efforts to ensure the accuracy of the information contained herein but provides no warranty or representation as to its completeness or accuracy.

Some entities of the NS Partners Group or their clients may hold positions in the financial instruments mentioned or may act as advisor to related issuers.

This content may not be distributed or used in any jurisdiction where such distribution or use would be contrary to local laws or regulations. Additional information is available upon request.

© NS Partners Group

May 2026 market outlook: Crazy

May 2026 Market Outlook: Crazy!

“Crazy” – Gnarls Barkley, 2006

“I remember when, I remember when I lost my mind…” The iconic words of Gnarls Barkley perfectly capture the euphoric trading desks of May 2026.

A relentless surge in computing demand drove the global semiconductor sector into an absolute buying frenzy. Driven by next-generation artificial intelligence infrastructure, memory hardware stocks experienced an astonishing vertical rally. This hyper-growth ignited a dramatic market divergence, widening the performance gap between technology-heavy indices and more traditional benchmarks.

This market outlook highlights how AI-related infrastructure spending continues to reshape market leadership. While concerns about concentration and valuation persist, investor enthusiasm remains firmly anchored to the companies powering the next phase of the artificial intelligence revolution.

“Does that make me crazy? Possibly.” Skeptics warning of a speculative technology bubble were quickly silenced by blockbuster corporate earnings. South Korean heavyweight SK Hynix spearheaded the charge, soaring more than 61% thanks to its near-monopoly position in high-bandwidth memory chips. Concurrently, Micron Technology gained 79%, crossing the symbolic $1 trillion market capitalization threshold. Even hardware supplier Seagate Technology joined the rally, benefiting from sustained cloud infrastructure spending to deliver a 21% monthly gain.

The three companies — SK Hynix, Micron and Seagate — have seen their share prices increase tenfold in just 12 months.

Needless to say, after a six-month pause, market concentration is back at elevated levels. Just 10 companies now represent more than 40% of the S&P 500, an all-time record. Eleven US-listed stocks now boast market capitalizations above $1 trillion — a threshold considered exceptional when Apple first crossed it in 2018.

Moreover, the United States is no longer alone in this exclusive club. Within Emerging Markets, TSMC, Samsung, SK Hynix and Saudi Aramco have also joined the trillion-dollar ranks.

“Crazy”, indeed.

The numbers behind this market outlook reinforce the narrative. The MSCI World gained 4.4% during the month, although performance dispersion remained significant. The technology-heavy Nasdaq rose 10.5%, compared with 5.2% for the S&P 500 and a more modest 2.4% for the Stoxx Europe 600. Japan delivered a strong 6.2% return, while the MSCI Emerging Markets Index, supported by its technology exposure, advanced 9.5%.

Growth clearly regained leadership, posting a 6.9% return, while Value lagged behind with a still respectable gain of 2%.

Fixed-income markets remained relatively calm, with only modest movements across both bonds and currencies. Oil prices experienced substantial volatility throughout the month, driven by alternating announcements regarding a potential ceasefire between Iran and the United States, but ultimately ended May down 16.7%.

Gold also retreated modestly (-1.5%), although it remains up 5% year-to-date.

Ultimately, this market outlook serves as a reminder that market leadership remains increasingly concentrated around the companies enabling the AI ecosystem. Whether this represents a new structural era or the early signs of excess remains one of the key questions facing investors.

 

This content is provided for information purposes only and does not constitute investment advice, an offer, solicitation or recommendation to buy or sell any financial instrument or investment product.

The views and opinions expressed are those of NS PARTNERS SA at the date of publication and may change without notice. References to specific securities, sectors or market developments are provided for illustrative purposes only and should not be interpreted as investment recommendations or investment research.

Past performance does not predict future returns. The value of investments and the income derived from them may fluctuate and investors may not recover the amount originally invested. Investments involve risks, including possible loss of capital.

References to market indices, benchmarks or other measures of relative market performance are provided for information purposes only. NS PARTNERS SA makes reasonable efforts to ensure the accuracy of the information contained herein but provides no warranty or representation as to its completeness or accuracy.

Some entities of the NS Partners Group or their clients may hold positions in the financial instruments mentioned or may act as advisor to related issuers.

This content may not be distributed or used in any jurisdiction where such distribution or use would be contrary to local laws or regulations. Additional information is available upon request.

© NS Partners Group

April 2026 market outlook: Ain’t no stoppin’ us now

April 2026 Market Outlook – AI Momentum Keeps Markets Rising

“Ain’t no stoppin’ us now” – McFadden & Whitehead, 1979

April’s market performance echoed the fabulous groove of McFadden & Whitehead’s “Ain’t No Stoppin’ Us Now,” as investors witnessed relentless momentum fuelled by structural shifts in technology.

At the heart of this April 2026 market outlook was the unwavering commitment of hyperscalers to GenAI. Quarterly earnings reports acted as a loud “groove,” revealing that capital expenditure is not just increasing — it is accelerating.

Peace talks stalling, the Ormuz Strait still closed, oil prices shooting up, rising inflation fears? No worries. Even when the macro environment threatened to “hold us back,” the sheer gravity of the AI revolution kept market sentiment firmly supported.

Hyperscalers are clearly chanting “Ain’t No Stoppin’ Us Now” as they pour massive amounts of capital into AI infrastructure — an investment theme extending far beyond the traditional IT sector. By month-end, the message from markets was clear: with the big boys in technology “all fired up,” the technological bull run still has plenty of soul left.

The numbers reinforced the tone of this April 2026 market outlook. The MSCI World soared 9.5% in April, with the tech-heavy Nasdaq leading the march (+15.6%). The S&P 500 added 10.4%, while Emerging Markets also stood out, rising 14.5%.

Unsurprisingly, in a month dominated by technology leadership, Growth largely outperformed Value (+12.3% vs +6.9%), while Europe lagged behind (+4.8%).

On the fixed-income front, the risk-on mood supported credit markets, with the Itraxx Crossover rising sharply (+3.3%), while long-term government bond yields barely moved. Gold edged slightly lower, while oil continued its ascent, with WTI now up 83% year-to-date.

Ultimately, this April 2026 market outlook suggests that, despite geopolitical tensions and inflation concerns, investors remain overwhelmingly focused on the transformative power of AI and long-term technology investment trends.

 

This content is provided for information purposes only and does not constitute investment advice, an offer, solicitation or recommendation to buy or sell any financial instrument or investment product.

The views and opinions expressed are those of NS PARTNERS SA at the date of publication and may change without notice. References to specific securities, sectors or market developments are provided for illustrative purposes only and should not be interpreted as investment recommendations or investment research.

Past performance does not predict future returns. The value of investments and the income derived from them may fluctuate and investors may not recover the amount originally invested. Investments involve risks, including possible loss of capital.

References to market indices, benchmarks or other measures of relative market performance are provided for information purposes only. NS PARTNERS SA makes reasonable efforts to ensure the accuracy of the information contained herein but provides no warranty or representation as to its completeness or accuracy.

Some entities of the NS Partners Group or their clients may hold positions in the financial instruments mentioned or may act as advisor to related issuers.

This content may not be distributed or used in any jurisdiction where such distribution or use would be contrary to local laws or regulations. Additional information is available upon request.

© NS Partners Group

March 2026 market outlook: How long?

March 2026 Market outlook – Geopolitics, Oil and Stagflation Fears

“How Long” – Ace, 1974 and Lipps Inc, 1980.

March 2026 ends on a bitter note, echoing the haunting refrain of Ace: “How long has this been going on?” Once again, the Middle East is ablaze, plunging markets back into a cycle of tension we had hoped was fading.

In this March 2026 market outlook, this chronic instability acts like a poison on risk appetite, forcing investors to wonder just how much longer geopolitics will continue to overrule — or deeply affect — economic fundamentals.

The consequences are immediate: oil prices are soaring, reigniting inflationary fears just as central banks were attempting to stabilize rates. Uncertainty surrounding shipping routes and energy supplies is creating palpable nervosity across stock indices, with no real flight to safety, as gold as well as govies nosedived.

Beyond the fear that this conflict is here to stay for a while, the risk of its consequences — ranging from rising inflation to falling activity, in other words the infamous stagflation — has roiled almost all asset classes.

Even if a glimmer of hope surged on the very last day of the month, the market seems to whisper, like Ace and Lipps Inc, “I ain’t quite as dumb as I seem,” fully aware that peace remains a fragile mirage.

The numbers confirm the tone. WTI soared by more than 51% in March, triggering inflation fears that propelled 10-year government bond yields to the upside. The dollar found a bid and rose against all major currencies, but, quite unexpectedly in such an environment, gold fell by 12.1%.

Risk-off was also felt in credit markets: the Itraxx Crossover fell close to 2.8%, hampered by rising rates, widening spreads and suspicions about an ongoing crisis in private debt markets.

Equities slumped across the board. The MSCI World abandoned 6.6%, the S&P 500 5.1%, the Nasdaq 4.9%, Europe 8%, while even more pain was inflicted on Japan (-11.2%) and Emerging Markets (-13.3%). Growth and Value went down in sync (-6.8% and -6.4%), and Bitcoin added 2.2%, but remains down 22.2% year to date.

In the end, this March 2026 market outlook leaves investors with more questions than answers — and one lingering refrain: how long can this continue?

 

Past performance is not indicative of future results. The views, strategies and financial instruments described in this document may not be suitable for all investors. Opinions expressed are current opinions as of date(s) appearing in this document only. References to market or composite indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only. NS PARTNERS SA provides no warranty and makes no representation of any kind whatsoever regarding the accuracy and completeness of any data, including financial market data or other financial instruments referred to in this general comment. 

This document does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. Any reference in this document to specific securities and issuers are for illustrative purposes only, and should not be interpreted as recommendations to purchase or sell those securities.

References in this document to investment funds that have not been registered with the FINMA cannot be distributed in or from Switzerland except to certain categories of eligible investors. Some of the entities of the NS Partners Group or its clients may hold a position in the financial instruments of any issuer discussed herein, or act as advisor to any such issuer. Additional information is available on request. 

© NS Partners Group

February 2026 Market Comments: Are you Ready?

Market Comments – Are You Ready? Style Rotation, Rising Oil Prices and Geopolitical Risk Shake Global Markets

“Are you ready” – Billy Ocean, 1980.

Does Billy Ocean’s beat capture today’s market shifts? In turn, are you ready (or were you ready?) for recent weeks’ sharp shift in the global market outlook, with investors facing strong style rotation, rising oil prices, improving market breadth and, among other things, renewed concerns in private debt, followed at the very end of the month by a sudden escalation in geopolitical risk.

If the Dow Jones more or less flatlined during the month, helped by Energy and Cyclicals, significant damage occurred in software stocks on the back of AI-led disruption threats. Salesforce.com, the poster child of the unstoppable rise of SaaS in the corporate world, lost more than 8% in February, down 26% year to date, and this is not an isolated example. Microsoft, one of the world’s largest company, was down 8.7% in February and is down more than 18% year to date.

Few investors could say they were fully prepared for such a seismic market rotation: software stocks were extremely popular among investors because of their low capital intensity and recurring revenues attributes, and not only in public markets, as private equity as well as private debt also had elevated exposure to software companies. To wit, Blue Owl Capital had to halt redemptions in one of its popular fund investing in private debt; rising defaults and software exposure sparked broader contagion concerns in private credit markets.

The geopolitical bass line also intensified. Markets had some level of preparedness for a deteriorating situation in the Middle East, but clearly not for what happened on February 28, which led to a sudden increase in geopolitical risk premium and renewed volatility across global markets.

In a nutshell: growth vs value rotation, higher oil prices, and a rising risk premium — in essence, a challenge to many of the winning trades of the past few years, and a reminder that markets can quickly move into a more defensive, risk-off environment.

The MSCI World Index added 0.6% in February, very much helped by non-US markets: the S&P 500 lost 0.9% but the Stoxx 600 Europe, Topix Japan and MSCI Emerging Markets respectively rose 3.7%, 10.4% and 5.4%. Value stocks increased its advance versus Growth (+2.8% vs -1.7%) confirming the ongoing style rotation in global equity markets.

Government bonds thrived on the back of safe haven status, while credit markets suffered from the risk-off move and lost 0.2%. When geopolitical tensions rise in the Middle East, oil prices tend to move higher, and when risk-off sentiment dominates, gold prices usually follow. Oil gained 2.8% during the month, while gold rose 7.9%. Bitcoin was among the main casualties of the changing market environment, falling 18.6% in February alone and 27.4% year to date.

Overall, the combination of market rotation, higher oil prices, rising geopolitical tensions and stress in private debt markets suggests that the current investment outlook may be less supportive for the dominant trades of recent years, and that investors should be prepared for a more volatile and selective market environment.

Past performance is not indicative of future results. The views, strategies and financial instruments described in this market comments may not be suitable for all investors. Opinions expressed are current opinions as of date(s) appearing in this market comments only. References to market or composite indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only. NS PARTNERS SA provides no warranty and makes no representation of any kind whatsoever regarding the accuracy and completeness of any data, including financial market data or other financial instruments referred to in this general comment. 

This market comments does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. Any reference in this market comments to specific securities and issuers are for illustrative purposes only, and should not be interpreted as recommendations to purchase or sell those securities.

References in this document to investment funds that have not been registered with the FINMA cannot be distributed in or from Switzerland except to certain categories of eligible investors. Some of the entities of the NS Partners Group or its clients may hold a position in the financial instruments of any issuer discussed herein, or act as advisor to any such issuer. Additional information is available on request. 

© NS Partners Group

January 2026 Market Comments: High Energy!

January 2026 Market Comments

 

“High Energy” – Evelyn Thomas, 1984.

Volatility was the lead singer this month, hitting high notes on many asset classes. The AI revolution has reached a fever pitch, demanding a massive, non-stop surge of electrical power. Data centers are the new power-hungry stars, causing electricity demand to pulse like a heavy bassline: according to the IEA, the global power consumption of AI could double by 2026, a truly High Energy pace. Grid infrastructure stocks are climbing the charts as the world rushes to fuel the silicon brain. Nuclear and renewable sectors are vibrating with fresh capital, chasing the “everlasting love” of stability. The “Hyperscalers” are pouring billions into juice, ensuring their digital empires never lose the beat. Commodity prices for copper and uranium are dancing to an upbeat, aggressive tempo this winter. Investors are “caught up in a game of emotions”, which frequently, or always, lead to heightened volatility.

Gyrations were also very wide in Commodities and precious metals, and the good news in January is that the month ended on a positive note as a whole, which was not a given considering all the news flow, whether geopolitical or financial.

The MSCI World added 2.2% in January, the 10th consecutive month of positive returns, with US markets underperforming Europe, Japan and Emerging Markets: the S&P was up 1.4%, Europe 3.2%, Japan 4.6% and Emerging Markets 8.8%. Currencies had less impact last month, but the dollar was still under pressure. Value largely outperformed Growth (+4.6% versus -0.3%), most fixed-income markets were quite stable (barring the JGBs, which suffered again from rising yields in Japan).

Gold, despite a 11% fall on the last day of the month, still added 13.3%, slightly behind Oil which was up 13.6%. The major laggard in January was the Bitcoin, down 10.8%.

 

 

 

 

Past performance is not indicative of future results. The views, strategies and financial instruments described in this document may not be suitable for all investors. Opinions expressed are current opinions as of date(s) appearing in this material only. References to market or composite indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only. NS PARTNERS SA provides no warranty and makes no representation of any kind whatsoever regarding the accuracy and completeness of any data, including financial market data or other financial instruments referred to in this general comment. This document does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. Any reference in this document to specific securities and issuers are for illustrative purposes only, and should not be interpreted as recommendations to purchase or sell those securities. References in this document to investment funds that have not been registered with the FINMA cannot be distributed in or from Switzerland except to certain categories of eligible investors. Some of the entities of the NS Partners Group or its clients may hold a position in the financial instruments of any issuer discussed herein, or act as advisor to any such issuer. Additional information is available on request. © NS Partners Group

December 2025 Market Comments: Can the Bull Run “Do It Again”?

December 2025 Market Comments

 

“Do it again” – Steely Dan, 1972.

Investors would surely love financial markets to “Do it Again” in 2026; although Steely Dan’s classic is different as it’s all about repeating the same mistakes again and again, it would be nice to see almost everything rise in 2026 (barring Oil or Cryptos, it was hard to find a losing asset class in 2025). We’ve experienced almost every sentiment in 2025, from fear to greed, panic, FOMO, scepticism and euphoria; but, at the end of the year, bulls won.

So here we are, glasses raised at year-end, wondering: could the band play it one more time? Could 2026 be the encore — another year of liquidity, AI miracles, and soft landings? Or should we expect something different, in other words less capacity to overcome doubts when nasty events happen? “You go back, Jack, do it again, wheel turnin’ round and round”: we will face nasty events this year, like every year before; what matters is how do investors react to them. The market, like the crowd in the bar, is ready to dance again.

Just don’t ask what happens when the music stops.

The MSCI World added 0.7% in December and closed 2025 with an enviable 19.5% gain; almost all equity markets posted solid double digit returns in local currency terms (S&P 500 +16.4%, Stoxx 600 +16.7%, Topix +22.4%, Emerging Markets +30.6%), with a more balanced picture between Growth and Value (+18.2% and +20.4% respectively).

The narrative around AI in general has been a major driver of equity performance, as well as the probable path towards a more dovish Fed, especially at the end of the year.
Currencies, and the dollar in particular, have been an important factor in 2025. The weak dollar (-13.4% versus the euro for the year) makes that returns, when measured in the same currency, are very different compared to local currency returns; for once, Europe has been the best performer in 2025 in this context.

Government bonds faced opposite fates; the US debt did well, while its German counterpart did not. Credit was strong, Oil extremely weak (-20% for the WTI) and Gold extremely strong (+64.6%).

We enter 2026 with a positive mood, but also many possible threats, like high valuations, poor public finances in many countries, geopolitical instability and a possibly shaky private debt situation. So please, Mr Market, “Do it Again” in terms of performances in 2026, but don’t “Do it Again” with complacency regarding valuations or leverage, we know this ends badly.

 

 

 

 

Past performance is not indicative of future results. The views, strategies and financial instruments described in this document may not be suitable for all investors. Opinions expressed are current opinions as of date(s) appearing in this material only. References to market or composite indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only. NS PARTNERS SA provides no warranty and makes no representation of any kind whatsoever regarding the accuracy and completeness of any data, including financial market data or other financial instruments referred to in this general comment. This document does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. Any reference in this document to specific securities and issuers are for illustrative purposes only, and should not be interpreted as recommendations to purchase or sell those securities. References in this document to investment funds that have not been registered with the FINMA cannot be distributed in or from Switzerland except to certain categories of eligible investors. Some of the entities of the NS Partners Group or its clients may hold a position in the financial instruments of any issuer discussed herein, or act as advisor to any such issuer. Additional information is available on request. © NS Partners Group