Equity markets: Global losses due to Fed’s hawkish statements World equities declined by 1.7% in euro and 3.5% in local currencies. The main market driver was the FOMC meeting on September 19-20. As expected, the Fed did not raise its Fed Funds target range. However, Fed chairman Jerome Powell delivered a rather hawkish speech. He insisted on inflation remaining elevated, while the US economy still grows at a healthy pace. As a result, one final hike is expected before year end, but the pace of monetary easing should be slow in 2024. The latest US CPI , published on September 13, did not justify a softer tone by the US central bank. The CPI rose from 3.2% to 3.7% in August. Core inflation (ex Food & Energy) declined from 4.7% to 4.3%, but both indices are still well above the 2% official objective. The higher for longer interest rates outlook had a negative impact on US equities , which dropped a lot more than European and emerging market equities . Unlike other sectors , energy was up as WTI crude rose (+9%) above 90 USD/bbl. Bond markets: US Treasury Bonds yield reaches its peak since 2007 Jerome Powell’s message pushed bond yields higher. The yield on 10-year US Treasury Bonds surged from 4.11% to 4.57%, a level last observed in 2007. The yield on 10-year Bunds rose from 2.47% to 2.84%. September was therefore not a good month for bond markets . The Bloomberg Global Aggregate EUR-Hedged Index, representing the global investment grade universe, was down 1.9%. Corporate bonds declined less than sovereign bonds. High yield corporate bonds outperformed. The average for Euro-denominated bonds was even slightly positive. Currencies: gold and EUR/USD rate impacted by high interest rates Suffering from higher interest rates, gold fell by 4.7% in USD. The US dollar strengthened on the back of the Fed’s hawkish tone. It gained 2.6% vs the euro , thereby reducing losses on US assets for eurozone investors.

Equity markets: volatility is back World equities were weaker in August (-1.3% in euro and -2.1% in local currencies). The Fed’s monetary policy remained at the heart of investors’ concerns. During the first half of the month, sentiment deteriorated on fears of more tightening, and equities dropped by about 5%. As the outlook then turned into a more dovish scenario, equities rebounded and almost erased their losses. Jerome Powell delivered a highly anticipated speech at the Jackson Hole annual central banker gathering but did not move the markets. He simply confirmed the Fed’s inflation target (2%) while taking into account a range of economic indicators. Analysts generally expect no hike at the next meeting (September 20) and a final hike (+25 bps) at the following meeting (November 1). The Federal Reserve has no particular reason to worry about the economy. The US GDP rose by 2.2% during the second quarter. Inflation is moving in the right direction but remains too elevated to cut rates. The US CPI rose by 3.2% in July and the Core CPI (ex Food & Energy) was up 4.7% over 12 months. Eurozone economic indicators are weaker. Second quarter GDP growth was only +0.6% and inflation is higher than in the US. Core inflation (5.5%) is sticky. Emerging markets underperformed, mostly due to China. The People’s Bank of China cut rates for the second time as economic indicators deteriorated. Mid and small cap stocks fell more than large caps. Sector dispersion was limited. Energy and healthcare outperformed. Bond markets: long-term rates approaching peak Bond markets were relatively quiet. Long term rates rose modestly. The yield on 10-year T-bonds went from 3.96% to 4.11%. 2-year yields in USD and EUR declined marginally. The Bloomberg Global Aggregate EUR-Hedged Index, representing the global investment grade bond universe, was down 0.3%. Corporate high yield bond indices rose modestly. 3-month treasury bills currently offer a higher yield than 2-year bonds, as the Fed and the ECB are expected to cut rates in 2024 and 2025. Currencies and commodities: euro weakens in comparison to the dollar The euro depreciated vs. the dollar (-1.4%) but gained 3.5% vs. the NOK. Gold declined by 1.3% in USD (stable in EUR). Crude oil rose by 2% (83.6 USD/bbl at month end).

Equity markets: Nasdaq 100 close to all-time high World equities remained very well oriented in July with strong gains of 2.6% in euro and 3.2% in local currencies. The first semester laggards outperformed in July. This included small and mid-caps stocks , up between 4 and 5% in Europe and even a bit more in the US. Emerging market equities , and Chinese equities in particular, made up some lost ground vs. developed markets. At the other end, the Eurostoxx 50, representing Euozone’s largest companies, was up “only” 1.7%. Performance dispersion between sectors diminished. Financial and energy stocks posted strong returns. The IT sector continued to make progress, but in line with broader indices. The Nasdaq 100 gained 3.8%, mainly thanks to the performance of Nvidia, Alphabet and Meta Platforms (> +10%). The index is not far from its high reached in November 2021. It is up 44.5% year to date. To find an even stronger performance over 7 months, one would have to go back to 2009 (rebound following the global credit crisis) and 1999/early 2000 (creation of the internet bubble). Bond markets: stronger investor confidence July was not such a good month for bonds . The Bloomberg Global Aggregate EUR-Hedged Index, which represents the global investment grade bond universe, declined by 0.1%. This slightly negative performance was due to government bonds. The yield on 10-year Treasury bonds rose from 3.84% to 3.96%. Likewise, the yield on 10-year Bunds rose by 10 bps and closed the month at 2.49%. Corporate bonds provided positive performance. Euro-denominated corporate bonds were up 1.1%, with little difference between investment grade and high yield bonds. Comparing the earnings yield on the S&P 500 (4.7%) and on 10-year Treasuries (3.96%), there is a 0.7% premium to own equities. This difference is minimal. It was 1.8% at the beginning of the year. It shows high confidence among investors. In the same vein, the price earnings ratio on Nasdaq 100 is close to 29 for 2023 and 24.5 for 2024. Central banks: further increase in key rates The Federal Reserve and the European Central Bank hiked interest rates by a quarter point. The Fed’s new target range is 5.25% - 5.50%. In its statement, the US central bank let the door open for a pause at the next meeting, depending on inflation getting closer to 2%. US inflation is definitely slowing down. The latest CPI release was 3% for June compared to 4% in May. The Fed also looks closely at the Core CPI, which went down to 4.8%. The European Central Bank raised its deposit rate to 3.75%. Its statement included encouraging signs on inflation, but balanced by the fact that underlying inflation remains high. Currencies and commodities: euro demonstrates resilience against dollar, while gold and oil prices surge The euro rose slightly vs the dollar (+0.8%) but weakened vs. other currencies, mostly the NOK (-4.9%). Despite lower inflation and higher interest rates, gold gained 2.4% in USD. Crude oil went up by about 15% 

Equity markets: rebound led by the technology sector World equities performed very well in June and closed the first semester on a significant gain of 11.5% in euro and 14% in local currencies. Sector dispersion was wide. In the United States, three sectors stood out: IT, consumer discretionary and communication services . More specifically, a large part of the positive performance came from 7 stocks: Nvidia, Apple and Microsoft (IT), Tesla and Amazon.com (consumer discretionary), Alphabet and Meta Platforms (communication services). This was partly due to expectations on artificial intelligence, or even entirely in the case of chip maker Nvidia (+190%). In addition, the macro environment improved for growth equities. Their poor performance in 2022 was due to surging long-term interest rates, rather than poor earnings. As inflation is decelerating, long term rates have stabilized in H1 2023, triggering a recovery in tech stocks. Those 7 mega cap companies now represent more than 27% of the S&P 500 Index. Their impact is clear when comparing the performance of the S&P 500 Index (+16.6%) with the average performance of each index component (+7%). For the vast majority of listed US companies, the first half of the year was positive but not exceptional. In this context, the Nasdaq 100 surged by 39%. Eurozone equities also performed very well. The Eurostoxx 500 gained 18.4%, with large contributions from technology companies (ASML Holding, Infineon and SAP) and consumer giants (LVMH, L’Oréal, Hermès). Small and mid-cap equities went up but underperformed large caps. “Value” and “High Dividend” investment styles did not participate to the rally. They contain a larger proportion of banks, consumer staples, energy, healthcare, and real estate. The Emerging Markets index only rose by +2.6% in euro and clearly underperformed developed markets, due to the Chinese market. Foreign investor confidence is still low, by fear of government interventionism and political tensions with the US. Bond markets: slight increase in yields compared with 2022 After rising significantly in 2022, bond yields only went up moderately in H1 2023. 10-year Bund yield went from 2.28% to 2.39%. US 10-year Treasury bond yield closed the semester at 3.84% against 3.64% at the end of 2022. Considering the income, sovereign and investment grade corporate bond indices posted a positive performance in 2023. High yield had a stronger performance, gaining more than 4% in euro. Central banks: the fight against inflation continues The main central banks tightened their monetary policy to fight inflation. The Federal Reserve raised its Fed funds rate from 4.25-4.50% to 5-5.25%. The European Central Bank raised its deposit facility rate from 2% to 3.5%, the highest level since 2001. USD and EUR yield curves are clearly inverted. Despite higher short-term rates, the US and Eurozone economies are not in recession and US unemployment is historically low (3.5%). As a result, analysts believe that short-term rates have peaked and may go down in late 2023 or at least in the spring of 2024. Currencies and commodities: appreciation of the euro and fall in European gas prices The euro appreciated vs. the dollar (+1.9%) and was much stronger vs. the yen (+12.1%), the Norwegian kroner (+11.6%) and the yuan. The first semester was uneventful for gold , which rose by 5.2% in USD. Energy and base metal prices declined. Conclusion Stock market performance in 2022 and H1 2023 demonstrates the difficulty of market timing and shows that tactical allocation should not only be based on recent performance. However, one can compare valuations between asset classes. The 2024 P/E ratio for the S&P 500 is 18.4, which is quite high, while bond yields are back to acceptable levels. Corporate investment grade bond yields in USD are close to 5.5%. Even though equities have the highest long-term expected return, their advantage is not as high as it used to be. For investors with a medium-term horizon, bonds offer an interesting alternative. In addition, the stock market rally has been narrow. The Nasdaq 100 trades at almost 25 x expected 2024 earnings, including much higher multiples for Tesla, Nvidia, Amazon.com and even Microsoft. One has seen in the past that very high valuations for market leaders rarely leads to attractive long-term performance. Of course, even for companies that seem overvalued, valuations can remain sky high for a long time and timing is difficult. At the opposite, small and mid-cap stocks trade at less than 15 x expected earnings for 2024 and offer a much better safety margin. They continue to represent a good portion in our managed portfolios.

Equity markets: major sectoral disparities World equities declined marginally in local currencies (-0.3%). Expressed in euro, they gained 2.4%. Positive market performance was highly concentrated in US technology stocks . Within the IT sector, Apple (+4.6%) and Microsoft (+7.1%) posted a strong performance, but the stock price of the third largest company, Nvidia, skyrocketed (+36.3%). Investors expect strong demand for Nvidia’s artificial intelligence chips. Nvidia’s market capitalization is now close to 1 trillion USD, meaning that it has become the world’s fourth largest public company behind Apple, Microsoft and Alphabet but before Amazon.com. The stock prices of chip manufacturers Broadcom and AMD also surged (+29% and +33.3%). Apart from IT, only communications services and consumer discretionary sectors advanced, but only in the US thanks to the performance of Amazon.com, Tesla, Alphabet and Meta. The Nasdaq 100 surged by 7.7%. Performance in the other sectors was negative, more so in energy, real estate, consumer staples, materials and utilities . The US debt ceiling deadline ($31.4 trillion) and the risk of a US default weighed on all sectors unrelated to AI. Of course, there will be no default. After though negotiations, Republicans and Democrats reached a compromise. On May 31, the House of Representatives, in which the Republicans have a very short majority, voted to suspend the debt ceiling for the next two years. The Senate, controlled by the Democratic party, will surely vote in favour of this before June 4. Small and mid-cap stocks underperformed. Once again, Chinese equities performed poorly and lowered the average performance of emerging markets . This was due to disappointing economic indicators for the manufacturing activity and the real estate sector. Korean and Taiwanese equities performed well (due to semiconductors), and so did the Indian market. Bond markets: yields rise in the United States The US debt ceiling issue had an impact on the dollar bond market , but yields did not rise significantly. The yield on 10-year US Treasury bonds went from 3.42% to 3.64%. There was little volatility in the euro debt market . The yield on 10-year Bunds went from 2.31% to 2.28%. Bond indices (sovereign, investment grade and high yield) posted small positive returns. Central banks: rate hikes may be over The governing councils of the Federal Reserve and the European Central Bank met on the 3rd and 4th of May. Both decided to raise their target rate by 0.25%. The Fed’s target range is now 5 – 5.25%. The next FOMC meeting will take place on June 15, and there is a good chance that the committee will leave its key rate unchanged. Inflation: encouraging figures Inflation continues to go down. The Year on Year CPI is now down to 4.9% in the US and 6.1% in the eurozone. Core inflation (excluding food and energy) is more resilient. It represents 5.3% in the eurozone and 5.6% in the US, where it is now above the broader CPI. Currencies: strong depreciation of the euro The euro fell sharply against the dollar (-3.0%) and the pound (-2.0%). To a lesser extent, it depreciated vs. the Swiss franc, the yen and the yuan.

Stock markets up, emerging markets and small caps behind The stock market rally continued in April as world equities gained 2.4% in local currencies. Expressed in euro, performance was slightly negative (-0.2%). European equities recorded the best performance (+2.4% for the Stoxx Europe 600 Index), the leading sectors being real estate, healthcare, energy and consumer staples. The S&P 500 gained 1.5% in USD, led by communication services (thanks to the strong performance of Meta Platforms), and consumer staples. Emerging markets posted a negative return mostly because of Chinese and Taiwanese equities. Small and mid-cap stocks once again underperformed large caps, particularly in the United States. April was less turbulent than March for the banking sector . Yet, one large US regional bank, First Republic, suffered a bank run and had to be liquidated. Its assets were bought by JPMorgan Chase and client deposits were safeguarded. JPMorgan and the 3 other largest US banks (Wells Fargo, Citi and Bank of America) are the winners of the current crisis, at the expense of a large number of medium-sized financial institutions. Few movements in bonds Bond yields did not change significantly. The Bloomberg Euro Aggregate Government Index was flat, while corporate bond indices went up moderately. At month end, the average yield to maturity on EUR-denominated investment grade corporate bonds was 4.15%, while high yield bonds offered an average yield of 7.77%. Inflation going down The latest inflation data show that it is trending down. The CPI is currently up 5% over the past year in the United States and 7% in the Eurozone. However, core inflation (excluding food and energy) does not weaken. It is currently still 5.6% in the United States and the Eurozone. Rate hikes almost over, no easing in sight The governing councils of the Federal Reserve and the European Central Bank did not meet in April, but had meetings scheduled on the 3 rd and 4 th of May. Both decided to raise their target rate by 0.25%. The Fed is close, or has already reached, the end of its hiking cycle, but has also made it clear that monetary easing will not immediately follow. As a result, yield curves remain inverted. Euribor 3-month stands at 3.27%, while the yield on 10-year Bunds is lower at 2.31%. The US yield curve is even steeper. Euro stays strong The euro gained 1.7% against the dollar, 2.2% against the yuan, 3.4% vs. NOK et 4.2% vs. JPY.

Equity markets rise despite banking turmoil The World Equities Index gained 2.4% in local currencies and 0.6% in euro. US equities outperformed other regions by a wide margin. The S&P 500 rose by 3.6% in USD. This good result was achieved thanks to growth stocks. The IT sector, in which Apple, Microsoft and Nvidia represent 55%, surged by 10.2%. Communications Services, a sector dominated by Alphabet and Meta Platforms, gained 4.6%. The Nasdaq 100 Index surged by 9.5%. Value stocks lagged significantly. First and foremost, bank stocks fell as a mini-crisis unfolded in the sector. In the US, Silicon Valley Bank and Signature Bank, respectively the 15 and 19th largest banks in the country, faced severe liquidity issues had to stop their operations. Control of those banks was taken over by the Federal Deposit Insurance Corporation. In Europe, Credit Suisse faced huge withdrawals and the Swiss authorities brokered a rescue deal with UBS. Shareholders lost (almost) everything but deposits were protected. The energy and mining sectors also performed negatively in March, and so did real estate. The Emerging Markets Index gained 0.6% in EUR. Chinese equities recovered. Small and mid cap stocks performed poorly, with losses ranging between 2 and 3% in Europe and 3 to 5% in the United States. Rush to more secure bonds There was a flight to quality in bond markets . Governments bonds and, to a lesser extent, investment grade corporate bonds, delivered a positive performance. The yield to maturity on 10-year Treasury bonds went from 3.92% to 3.47%. For 10-year Bunds, the YTM declined from 2.65% to 2.29%. High yield corporate bonds did not perform as well, and the euro market even lost 1.2%. Their average yield to maturity rose to 7.68%. Soon the end of the rate hikes? On March 15, the European Central Bank Governing Council decided to raise the three key ECB interest rates by 50 basis points. The rate on the deposit facility, which banks may use to make overnight deposits with the Eurosystem, reached 3%. This decision was expected. Eurozone inflation is hard to bring down. Core inflation (excluding energy and food prices) even rose from 5.6% to 5.7% on an annual basis. On March 21, the Federal Reserve raised its Fed funds rate by 25bps to bring the target range to 4.75%-5%. Some analysts even thought that the Fed would pause. Thy did not, but their message became less hawkish. US inflation goes down faster than in Europe, and the Fed cannot ignore that aggressive tightening may trigger more failures in the banking system. For the next meeting (May 3), the consensus calls for another 25bps rate hike, but this should be the last one. Euro strengthens The euro gained 2.0% vs. USD, 2.1% against the CNY and 3.1% vs. the NOK. Gold price soars The price of gold surged by 7.9% in USD. Agricultural commodities rose and base metals were little changed. Crude oil prices declined.

Equity indices were mixed The World Equities Index closed the month with a loss of 1.9% in local currencies and 0.5% in euro. The Stoxx Europe 600 went up (+1.9%) but the S&P 500 fell by 2.5% (in USD). The Emerging Markets Index clearly underperformed (-4.2%), mainly because of Chinese equities. Growth stocks outperformed. The World Growth Equities Net EUR managed to advance (+0.5%), while other investment styles such as value and quality ended the month on a small loss. Sector wise, this meant that IT outperformed with gains for Apple, Microsoft and especially Nvidia. The underperformers were energy, healthcare, real estate and utilities. Bonds moved back slightly Bond markets also retreated. The Bloomberg Global Aggregate Hedged EUR, representing the global universe of investment grade bonds, declined by 1.3%. Duration, and not credit risk, determined performance. Within the euro-denominated universe, the Bloomberg Euro Aggregate Government fell by 1.2%. The Bloomberg Euro Aggregate Corporate Index (investment grade corporate bonds) lost only 0.5%. The Bloomberg Euro High Yield Index gained 0.8%. Credit spreads (yield premium vs. risk-free bonds of similar maturity) did not widen, they even narrowed somewhat. At month end, the average yield to maturity on investment grade corporate bonds was 4.36%, and 7.31% for high yield bonds. Inflation at the centre of concerns On February 1, the Federal Reserve (Fed) raised its Fed funds rate by 25bps to bring the target range to 4.50-4.75%. The Fed stated that ongoing increases in the target range are expected in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. Some statistics published later in the month (Change in Nonfarm Payrolls on February 3, Retail Sales on February 15 and PCE Deflator on February 24) were higher than expected, and analysts now expect the Fed to raise its target by 25bps at the next 3 meetings and reach a peak of 5.25% - 5.50% in June. On February 2, the European Central Bank (BCE) Governing Council decided to raise the three key ECB interest rates by 50 basis points. The Governing Council will stay the course in raising interest rates significantly at a steady pace and in keeping them at levels that are sufficiently restrictive to ensure a timely return of inflation to 2%. Another 50bps hike was pre-announced for the March meeting. The euro falls against the dollar The euro fell by 2.2% against the US dollar and 0.5% against the yuan but rose vs. the yen and the Norwegian kroner (+1.5%). Commodities in decline The Bloomberg Commodity Index (BCOM) was down 5%. Gold fell by 5.4%% in USD. Crude oil (WTI, Brent) declined a bit, but agricultural commodities and base metals recorded larger losses.

The beginning of 2023 more optimistic than 2022 In January, the World Equities Index rose by 6.5% in local currencies and 5.3% in euro. There was a trend reversal among sectors and styles. Growth stocks , which lagged in 2022, took the lead. The Nasdaq 100 Index surged by 10.7%. Information Technology, Communication Services (with Meta and Alphabet) and Consumer Discretionary (with Amazon.com and Tesla) outperformed the S&P 500. Real estate stocks and Chinese equities, under pressure last year, gained more than 10%. The Eurostoxx 50 rose by 9.9%. The big contributors in this rather concentrated index were luxury stocks (LVMH, Hermes et Kering) and semiconductor manufacturers (ASML Holding, Infineon) which gained between 15 and 20%. A few sectors did not participate to this rally: the defensive ones (Consumer Staples, Utilities, Healthcare) as well as energy. The Emerging Markets Index went up by 6% in euro and 6.5% in local currencies. Chinese, Korean and Taiwanese benchmarks gained more than 10%. The reopening of the Chinese economy is under way and its manufacturing PMI rose above 50. However, two significant accounting frauds were uncovered at Americanas (Brazilian retailer) and Adani (Indian conglomerate), reminding us that corporate governance is generally weaker in emerging markets than in Europe. The equity market rally was fueled by expectations of lower inflation and the end of the hiking cycle approaching, perhaps even monetary easing in the second half of 2023. The latest CPI figures were indeed lower than a few months ago : 8.5% in the Eurozone in January (vs. 9.2% in December) and 6.5% in the United States in December (vs. 7.1% in November). In addition, 4Q GDP growth announced for the United States (+2.9%) and especially for the Eurozone (+1.9%) were stronger than expected. Bond yields down The 10-year Bund yield went down from 2.57% to 2.19%. The yield on 10-year Treasury Bonds decreased from 3.87% to 3.51%. In terms of performance, high yield bonds outperformed. The Bloomberg Euro High Yield Index gained 3.1%. Its yield to maturity is now slightly above 7%. Euro-denominated investment grade bonds (both sovereign and corporate) gained a bit more than 2%. USD-denominated bond performance was a bit stronger. Euro gains The euro gained 1.5% vs. the US dollar and 3.4% against the NOK. Against other major currencies (GBP, CHF, JPY, CNY), there was little change. Gold up and oil down slightly Gold gained 5.7% in USD. Oil price (WTI) went down a bit (-1.7%; 78.9 USD/bbl). European natural gas (Netherlands TTF Natural Gas Forward Month 1) plunged by 21% (59 EUR/Mwh), a level last seen in September 2021 well before the Russian invasion of Ukraine.