Liquidity pours in! Here's what it means for your investments | October market trends
Join Victor Cianni, FRM Alpian's Chief Investment Officer, as he navigates the twists and turns of the markets during September 2024 following the rhythm of one special song. To listen to the song of the month, you can follow our Spotify playlist.
Autumn is here, and while we watch the rain falling outside, there’s something else pouring down on the markets: liquidity! But is this a good sign? We’ll explore this in our “Market at a Glance” section.
What is definitely good news is that Alpian Bank is celebrating 2 years of banking and growth with you—something we’re incredibly proud of. We have plenty of reasons to mark this occasion, starting with:
Our continued promise to support your financial growth with unchanged interest rates.
The launch of our new investment service, Managed by Alpian Essentials, which lets you start an ETF savings plan with just CHF 2,000.
As always, we’re here to help you grow your wealth, rain or shine.
Happy reading—and here’s to many more years of financial growth together!
The market at a glance
Let it rain!
September is bound to be a month to remember. For many investors, the past few years have felt like wandering through a desert, parched and searching for drops of liquidity as central banks played the part of the merciless sun.
And then—hallelujah—the rain came. It’s almost as if the central bankers finally heard our prayers and decided to play gods, showering us with interest rate cuts. And they weren’t alone; governments joined the party, making it rain stimulus programs like there’s no tomorrow. So, as a fitting tribute to this newfound generosity and abundant liquidity, we’ve picked Eric Clapton’s 1970 classic "Let It Rain" to set the mood for our newsletter.
So, let it rain! After all, liquidity is the invisible tide driving global markets, right? The ease with which money flows through institutions—central banks, commercial banks, and into the broader economy—affects everything from stock prices to economic stability. At least, that’s what the textbooks say.
But wait...
Was liquidity really missing these past months? Liquidity isn't just about interest rates. From a broader perspective, it’s clear that it had been already improving throughout the year. Also is this sudden abundance truly a good omen?
We’ll try to answer these questions, but first, let’s review how the markets reacted to the flood of good news.
Key takeaways
Central banks and governments saw central banks and governments delivering interest rate cuts and stimulus packages, creating a “liquidity rain” across financial systems.
Global equity markets showed mixed reactions: U.S. and European markets were slightly up, while Switzerland and Japan declined, but China surged with a notable 17.5% increase.
Bond markets welcomed the liquidity, with global bond markets rising by 1.2% this month.
Commodities markets experienced fluctuations: gold shined, oil slipped, and the Swiss franc strengthened, pressuring exporters.
Cryptocurrency markets remained stagnant, trading within the same range for the past six months.
Demystification room
How interest rates quietly shape our decisions
You've probably heard about interest rates lately, especially with central bank policies in the spotlight.
Interest rates, though seemingly technical, directly affect our lives. They act as a “nudge,” subtly shaping our decisions. How?
Interest rates: A push to spend or save
When interest rates are low (say 0.1%), there's little incentive to save, so we tend to spend more. But if rates rise to 2%, saving becomes more appealing. That’s how the Swiss National Bank (SNB) encourages spending or saving—low rates boost spending, while high rates make saving attractive.
Buying on credit: How rates affect us
Low mortgage rates (around 1.5%) prompted many Swiss to buy homes, but rising rates (to 3% or more) can make mortgages costlier, discouraging property purchases.
Investing: How rates shape choices
The SNB’s recent cut from 2% to 1% makes traditional savings less rewarding, pushing investors toward riskier assets like real estate or stocks. Conversely, if rates rise to 3%, bonds and safer investments become more attractive.
A subtle yet powerful influence
Interest rates, whether rising or falling, shape our spending, saving, and investing habits without us always noticing. They are a hidden force that influences our financial decisions, day by day.
Alpian news
More for your wealth in October
Autumn is typically a time when we have more space to reflect on our finances—while our wallets recover from summer spending and prepare for the year-end festive season. That’s why we’ve decided to give your wealth a boost:
Competitive interest rates
While the Swiss National Bank cut interest rates and most banks followed suit, we’re keeping our rates unchanged: 1% on CHF for full account balances over CHF 100,000 (0.75% otherwise), 1% on EUR for balances up to EUR 500,000, and 1% on USD for balances up to USD 100,000. And remember, we pay interest monthly, so you don’t have to wait until the end of the year to enjoy the benefits.
Introducing "Managed by Alpian Essentials"
We’re excited to launch our new investment offering—Managed by Essentials—a suite of ETF plans designed to help you grow your wealth over the long term, available from just CHF 2,000.
Our ETF plans come in a range of options to suit all types of investors: whether you have a global outlook, prioritise sustainability and ethical practices, or want exposure to both traditional and digital assets. Plus, our solutions come with a fair price tag—at 0.75%, they’re on average 40% cheaper than those of traditional banks, without compromising on quality. And the best part? Our investment team manages everything for you.
Two great reasons to optimise your finances!
SHEWEALTH Collective
Second screening of Show Her The Money
Due to popular demand, we’re thrilled to announce a second screening of the award-winning documentary Show Her The Money in Zürich on October 31st, 2024! This film highlights the urgent issue of women receiving less than 2% of venture capital funding. We will have a packed evening with the screening, a panel discussion featuring Azin Radsan van Alebeek, Co-Founder and General Partner at Emmeline Ventures, and Olga Miler, Founder and CEO of SmartPurse - Fun, Financial Education for you and your workforce followed by an apero and networking.