The attention of the markets is entirely on the Federal Reserve: the markets served a first cut of the rates next week already after the CPI of August 2025. However, the picture is more challenging after the last figure of September: growth slows down while core inflation remains above 3% (+3.1% per year), driven by difficult items to compress such as services, rentals and medical expenses.
Usa stock: weighs risk stagflation
Giacomo Calef, Country Head Italy of NS Partners underlines it explaining that the persistence of “Sticky” components – Shelter (rentals and Owners’ equivalent rents), services and health costs – complicates the path of cuts: currently the policy rate of the Federal Reserve is located at 4.5% (upper limit of the range) and the expectations for 2026 indicates at least five tags from 25 base points each. For example, shelter weighs a lot in the basket and responds with delay to policy changes due to fixed -term contracts and long times to adjust the housing offer; The services reflect wages and contracts that slowly adjust; Healthcare is influenced by demographic factors.
It is the hour of active management
This mix feeds the risk of stagflation: real growth of GDP which slows down and weaker labor market without prices quickly returning under control. On the stock exchange the reaction was twofold and contradictory. On the one hand, the S&P 500 continues to be driven by a few megacaps, making the index less representative of the overall market of the market. On the other, a rotation was recorded from the inflation figure in August: Small and Mid Cap, after months of submarine, have marked significant recoveries.
The trajectory of the Fed Funds remains the main unknown. The level of real rates could remain high for time and the rhythm of the descent is not at all obvious. The high dispersion between securities and sectors rewards active management: long/short strategies and bottom-up approaches can exploit the divergence of performance between megacaps and more domestic and cyclical realities.
On the international front, the Swiss equity presents itself as a defensive landing: the SLI companies (Swiss leader Index), the index of the major and more Swiss blue-chip liquids, serve an aggregate growth of profits for about 10% for the next year, an element to be considered in the construction of the asset allocation to reduce dependence on the Usa Tech ecosystem.
Also in China
Finally, a glance at China: in the last ten years the company’s company profits 300 have grown much less than the ‘Ps & P 500 (respectively only +8.6% against +133.1%!), Making the long-only approach less attractive. In our opinion, this creates concrete opportunities: the greater dispersion and evaluation discounts open spaces for active Long/Short strategies capable of exploiting inefficiencies and recadificating the country risk, concludes the expert.
