Interestingly, the absolute value of Swiss CPI / LIK for September is down by -0.55% from its peak in May and June…
We do have deflation, as measured by the CPI, from time to time (more than on an anecdotal level). This may be one thing that worries the SNB and pushes them to cut rates.
If inflation drops too fast and there is a risk of getting to deflationary levels, then the SNB might even cut the rate by 0.5% in december this year.
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That would be a nice Christmas gift 
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Feels like a time for a benchmark update, before we are, probably, heading into turbulence.
My benchmark of the global stocks market is “MSCI ACWI IMI Net Total Return in CHF” as calculated by MSCI. To adjust it for the inflation, I divide its value in CHF by the value of “Landesindex der Konsumentenpreise (LIK)” (“Swiss CPI”) for the previous month.
Previously on “Chronicles of Fat Years” (season 2024-2027):
16.07.2024: The benchmark reaches a new ATH at 2121.76 CHF nominal! The YTD gain is +22.1% in nominal CHF, +20.3% in inflation-adjusted CHF.
“Falling, I’m falling”: Panic in the markets! The minimum of benchmark is on 5.8.2024 at 1843.76 CHF nominal. The decline from ATH is -13.1% nominal and -12.9% inflation-adjusted, corresponding to “usual” Correction territory. YTD it is +6.1% in nominal CHF, +4.7% in inflation-adjusted CHF.
After that things were rather boring.
19.08.2024: intermediate maximum at 2030.22 CHF nominal. -4.3% nominal / -4.1% inflation-adjusted from ATH, +16.8% nominal / +15.3% inflation-adjusted YTD, +10.1% from the minimum on 5.8.2024. Normal regime.
LIK for August goes down a bit.
06.09.2024: intermediate minimum at 1928.95 CHF nominal. -9.1% nominal / -8.8% inflation-adjusted from ATH, +11% nominal / +9.6% inflation-adjusted YTD, -5%/-4.9% from the maximum on 19.08.2024. Mild correction.
LIK for September goes down rather sharply (well, for LIK).
Then, a funny thing happened:
18.10.2024: the benchmark in nominal terms reaches a new intermediate maximum at 2117.05 CHF. -0.2% from ATH, +21.8% YTD, +9.8% from the minimum on 06.09.2024.
However, the inflation-adjusted benchmark, which typically, and long-term always, lags behind the nominal one, reaches a new ATH with +20.7% YTD gain.
I thought that it is a matter of one or two more days until the nominal benchmark also reaches a new ATH, but market gods decided to play with me. The markets went down.
As per 31.10.2024, after the Halloween sell-off, the nominal benchmark stands at 2055.55 CHF, -3.1% from ATH, +18.3% YTD and -2.9% from the maximum on 18.10.2024. Very normal, despite of what you may feel.
The inflation-adjusted benchmark stands at -2.9% from ATH and +17.2% YTD.
Stay tuned for the next episode!
元艺人
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I haven’t looked at the actual index yet, but here are some media impressions:
P.S. The index value of LIK is -0.1% down from the previous month (September) and -0.64% down from the top.
That makes the inflation-adjusted YTD gains to be only 1 percent point below the nominal ones.
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Well, you have probably guessed it already.
My benchmark of the global stocks market is “MSCI ACWI IMI Net Total Return in CHF” as calculated by MSCI. To adjust it for the inflation, I divide its value in CHF by the value of “Landesindex der Konsumentenpreise (LIK)” (“Swiss CPI”) for the previous month.
As per 6.11.2024, the benchmark had reached a new ATH in nominal (2139.07 CHF) and in inflation-adjusted terms. The YTD gains are +23.1% nominal and +22.0% inflation-adjusted CHF. The move up from 06.09.2024 minimum is +10.9% nominal and 11.3% inflation-adjusted.
元
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Benchmark update! Let’s wrap up 2024 results.
As a benchmark of the global stocks market I use “MSCI ACWI IMI Net Total Return in CHF” as calculated by MSCI. These data can be downloaded from MSCI website using a non-obvious procedure outlined above.
Besides the nominal value, I also look at the inflation-adjusted data. To do the inflation adjustment, I divide the value in nominal CHF by the last known value of “Landesindex der Konsumentenpreise (LIK)” (“Swiss CPI”). That means, to allow “real-time” analysis of data, during a running month I use LIK for the previous month. For the last (week)day of a month, I use LIK for that month. Usually it takes few days to be calculated and published, but this procedure is more consistent with the historical analysis of inflation-adjusted stock market returns. So I effectively do both “real-time” and “historical” analysis in one table.
The exact reference date of LIK that I use is not relevant, because for inflation-adjusted data I only look at relative changes.
LIK status:
LIK for November came -0.2% below the value for October and -0.83% below the peak value for May and June 2024.
LIK for December came unchanged.
The one year inflation for 2024 (change from Dec 2023 to Dec 2024) was +0.65%.
Market Benchmark status:
On 16.12.2024, the benchmark had reached a new ATH in nominal (2213.06 CHF) and inflation-adjusted terms. The YTD gains were +27.3% in nominal and +26.5% in inflation-adjusted CHF.
2024 was finished at the benchmark level of nominal 2178.11 CHF with yearly gains of +25.3% in nominal and +24.5% in inflation-adjusted CHF, -1.6% below ATH.
Stay tuned for the next episode!
元博士
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Benchmark update:
As a benchmark of the global stocks market I use “MSCI ACWI IMI Net Total Return in CHF” as calculated by MSCI. These data can be downloaded from MSCI website using a non-obvious procedure presented before.
Besides the nominal value, I also look at the inflation-adjusted data. To do the inflation adjustment, I divide the value in nominal CHF by the last known value of “Landesindex der Konsumentenpreise (LIK)” (“Swiss CPI”). That means, to allow “real-time” analysis of data, during a running month I use LIK for the previous month. For the last (week)day of a month, I use LIK for that month. Usually it takes few days to be calculated and published, but this procedure is more consistent with the historical analysis of inflation-adjusted stock market returns. So I effectively do both “real-time” and “historical” analysis in one table. The exact reference date of LIK that I use is not relevant, because for inflation-adjusted data I only look at relative changes.
This time LIK for January 2025 took longer than usual to release, so I was also waiting for it.
LIK status:
LIK for January 2025 went down -0.053% vs. the value for December 2024 and -0.85% below the peak value for June 2024. The 12m change was +0.4%. This is the lowest 12m change of LIK after April 2021!!!
Market Benchmark status:
The latest ATH of 2278.7 CHF nominal was reached yesterday, 13.02.2025. The YTD gains are +4.6% in nominal and +4.7% in inflation-adjusted CHF.
Despite what you might have read, the benchmark movements since the beginning of the year were rather subdued. The YTD change in 2025 was never negative. I noticed that in fact strong movements of the benchmark (or VT) value in USD were countered by USDCHF movements: when stocks were going up, USDCHF was going down and vice versa. Since the beginning of November 2024 there were never significant drawdowns, the strongest was -2.8% from December 16 to 19, 2024.
Furthermore, since March 2024 we had 9 new ATHs in nominal terms, and I am not counting occasions when they were clustered next to each other! They occurred on 27.03.2024, 22.05.2024, 16.07.2024, 11.11.2024, 22.11.2024, 04.12.2024, 16.12.2024, 23.01.2025 and 13.02.2025.
In a broader context, on February 19th will be a 5 year anniversary of the pre-COVID ATH (according to the benchmark employed). As per 13.02.2025, the benchmark is +49.4% in nominal and +40.7% in inflation-adjusted CHF from it.
You will probably hear from me next month.
元博士
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This is an important observation. Since I paid attention to the movements of my benchmark (VT) in Euros, it seems that the exchange rate movements dampened volatility of the Dollar-denominated benchmark a lot, when in Euros. The Euro and stocks have been moving in the same direction.
I think it is likely not to persist forever, but for now there is a huge positive effect.
Short benchmark update (MSCI ACWI IMI Net Total Return in CHF):
As per 3.04.2025, it is -13.5 % (inflation adjusted -14.1%) from ATH and -9.2 % (inflation adjusted -9.7%) YTD. Yesterday’s drop alone was -6.3% in one day.
Welcome to the correction!
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As per Fr. 4.04.2025, it is -18.1 % (inflation adjusted -18.6%) from ATH and -14.0 % (inflation adjusted -14.5%) YTD. One day drop was -5.2%.
S&P 500 futures are currently -3.67%.
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