Not a great year yet

We’re almost 1 quarter into 2025. Financial reporting season has come to an end. Time to see how the markets have been doing so far. Because the first three months, or should we say as of 21 January, has seen more ups and downs than the whole of 2024.

S&P 500

The leading indicator, the S&P500 has shown a loss of 3% YtD.

The magnificent 7, the shining stars of 2024 have collectively lost 12%.

The remaining S&P493 showed a YtD performance of +1%. 

 US executives are anxious about the economy

On top of the somewhat disappointing stock market performance, US CEO confidence has officially dropped to its lowest level in 13 years, falling 5 points over the last month. This marks the largest monthly decline in the history of the poll, according to Chief Executive Magazine surveying 220 US CEOs.

The current business conditions assessment dropped 20%, to 5 points, the lowest since 2020. Furthermore, economic outlook for the next 12 months fell 28% to the lowest since November 2012.

Only 39% of respondents now believe the business climate will improve this year, down from 52% at the beginning of the year. At the same time, 36% expect things to get worse, up from 20% in January. And what are they then doing? Right they are (massively) selling stocks…

Which is reflected in days that we have seen in the past month. For example, 20 March:

 “This morning, between 4:40 AM and 6:20 AM ET, S&P 500 futures erased -$600 BILLION of market cap without any major headlines. These sudden "flash crashes" are being seen in ALL risky asset classes.”

More potential bad news for US stocks

According to Allianz Life’s Q1 study, 51% of Americans now expect a significant stock market crash, up from 46% in Q4 2024. This rising anxiety reflects growing concerns about market volatility, economic uncertainty, and global risk factors. Whether it's rate cuts, geopolitical tensions, or recession fears, it looks like the mood is shifting.

 And if that is not enough, fund managers have rotated out of U.S. stocks at the fastest pace in history.

And where is this (and other) money going to? Some of it is definitely going to Europe.

So, is Europe doing better?

In short, yes. So far in 2025 (YTD), the leading EURO STOXX 50 index (ESTX50) has returned almost 10% (as per 27-03-2025). In less than 3 months.

And our own Dutch AEX? Not as great as the ESTX50, but not bad either. A return between 4-5% (as per 27-03-2025).

Sources: Goldman Sachs, CEM, Haver, Deutsche Bank. Kobeissi Letter, FT, Barchart, Verity Data, BofA, Bloomberg, Macrobond, Investing.com, Stoxx.com, AllianzLife