In today’s heightened volatility, retail investors might be carried away by emotions, and this is when smart investing is imperative. The opening months of 2026 have been marked by significant market swings, driven by alternating waves of fear and optimism surrounding artificial intelligence, unexpected geopolitical developments, and growing uncertainty over monetary policy direction. This created a more challenging climate for long-term rational investors who seek long-term value creation, while emotionally driven investors have been more vulnerable to impulsive and costly investment decisions. 

Market overview 

Over the past six months, global financial markets navigated a highly complex environment marked by elevated volatility, persistent inflationary pressures, renewed geopolitical conflicts, and capital flows increasingly dominated by artificial intelligence. Despite several episodes of sharp corrections during the period, most notably following the escalation of the Iran conflict and the resulting spike in energy prices, global equities ultimately proved remarkably resilient, supported primarily by the strong corporate earnings and investment momentum surrounding the AI infrastructure buildout. 

The macroeconomic backdrop remained uneven across regions. While the U.S. economy demonstrated relative resilience, supported by AI-driven investment activity and energy independence, Europe and several emerging economies became progressively more exposed to the negative consequences of higher energy prices and weakening industrial momentum. Inflation remained more persistent than policymakers had anticipated, effectively postponing expectations for a meaningful monetary easing cycle and, in some regions, even reviving discussions around potential further tightening. 

Following the market turbulence recorded during the first quarter of 2026, equities staged a powerful rebound as investors gradually gained greater visibility regarding global trade tensions and tariff-related risks. The artificial intelligence investment theme continued to  dominate market performance throughout the period, with earnings reports from hyperscalers and semiconductor companies consistently reinforcing expectations for a prolonged investment cycle focused on AI infrastructure, data centres, and advanced semiconductors.  

Technology and communication services sectors, increasingly concentrated around the “Magnificent 7” ecosystem, materially outperformed most traditional sectors. Such dynamics contributed to historically narrow market breadth, with a small number of mega-cap names accounting for a disproportionate share of overall index performance. 

How our Autumn 2025 Top Picks performed

Between October 2025 and April 2026 global equity markets delivered a decent performance, which was quite impressive given the high volatility experienced during the period, in particular after the conflict in Iran broke out. 

Our strongest conviction, BNP Paribas, materially outperformed both the benchmark and the broader basket of recommendations from the outset of the period. Initially, the stock benefited from a highly discounted valuation caused by the French political crisis in 2025. As political uncertainty gradually eased, the shares re-rated strongly alongside the broader European banking sector. Although the spike in energy prices triggered by the Iran conflict later raised concerns regarding the Eurozone economic outlook, the powerful rebound in equity markets during April ultimately supported a remarkable total return of 33.1% for the position, significantly outperforming global equities. 

Our second recommendation, Spotify Technologies, experienced a substantial de-rating in valuation multiples amid rising concerns over slowing consumer spending trends across developed markets. While the company continued to demonstrate the key attributes supporting our investment thesis, namely a strong competitive moat and dominant market positioning, investor attention shifted back toward artificial intelligence beneficiaries which weighed heavily on sentiment. As a result, the stock delivered a disappointing total return of -33.1% during the period. 

Among our Magnificent 7 selections, Amazon experienced particularly elevated volatility. Investor concerns initially focused on the prospect of extremely large capital expenditure commitments required to maintain competitiveness within the ongoing artificial intelligence infrastructure race. However, sentiment later reversed sharply as enthusiasm surrounding the AI theme intensified again, allowing the stock to recover despite deteriorating free cash flow generation and increasingly aggressive capital expenditure (capex) guidance from management. Ultimately, it modestly outperformed the broader market, delivering a total return of 6.5%. 

Microsoft Corp, our second Magnificent 7 recommendation, became caught in the February “SaaS-acre” selloff, during which software companies were indiscriminately repriced lower amid fears that artificial intelligence could eventually disrupt large parts of their ecosystem. Despite the fact that more than 70% of Microsoft’s revenues are now linked to cloud-related activities, with both growth and margin resilience remaining evident, investors remained cautious toward the sector. Consequently, the stock posted a total return of -22.3% over the period. At current levels, the stock may present an attractive entry point. 

Finally, MercadoLibre underperformed expectations. Our investment thesis was based primarily on what we viewed as an attractive valuation relative to the company’s long-term growth potential. However, the deterioration in the macroeconomic outlook for emerging markets, particularly following the rise in energy prices, combined with signs of moderating profitability despite still robust top-line expansion, negatively impacted market sentiment. As a result, the stock recorded a total return of -24.3% during the period. 

Highlight on 5 thriving companies

Despite ongoing market turbulence, certain companies continue to capitalise on emerging opportunities and strengthen their competitive positioning, making them attractive additions to put on your watchlist. This article puts the spotlight on 5 such companies, identified through the following structured 3-step analysis: 

1. Sectoral screening: A sector-specific screening model is employed, incorporating a range of financial and operational metrics to assess the long-term viability of companies. Firms exhibiting consistently positive trends across these metrics are shortlisted for deeper evaluation. 

2. Financial modelling & common-size analysis: Detailed financial models are developed for selected companies to incorporate historical performance data and include a comprehensive common-size analysis to facilitate cross-sectional and time-series comparisons. 

3. One-year price target estimation: A one-year price target is determined using a Discounted Cash Flow (DCF) approach. The initial Weighted Average Cost of Capital used to discount projected free cash flows is tailored for each company. It reflects factors such as the firm’s business model, geographical distribution of sales, functional currency risk-free rate and outstanding leverage profile. DCF models’ assumptions are regularly benchmarked against the most recent earnings releases from companies. 

Meta Platforms 

As the world’s largest social media company by daily active users, Meta Platforms benefits from unmatched scale across social media, digital advertising, messaging, and increasingly artificial intelligence infrastructure. Despite regulatory scrutiny, elevated AI-related capital expenditures, and intensifying competition for user engagement, the company continues to deliver highly resilient revenue growth supported by its advertising network, superior user monetisation capabilities, and growing engagement across Instagram, WhatsApp, and Reels.  

Meta’s ongoing investment in AI infrastructure and recommendation algorithms is materially improving advertising efficiency and user retention, reinforcing its competitive position within the global digital advertising ecosystem. 

After periods of heightened volatility linked to concerns surrounding AI monetisation timelines, regulatory pressures, and the scale of ongoing capital expenditure commitments, the stock now offers an attractive long-term risk-reward profile relative to its structural growth prospects and free cash flow generation capabilities. We believe near-term pressure surrounding capex commitments should prove transitory, with financial performance expected to strengthen as the next phase of the artificial intelligence investment cycle develops. 

Booking Holdings 

Booking Holdings continues to navigate a more complex environment marked by moderating consumer spending trends, elevated geopolitical uncertainty, and increasing competition across digital travel platforms. Nevertheless, the company’s core growth drivers remain firmly intact, with its dominant global accommodation marketplace, highly diversified geographic exposure, and expanding alternative accommodation offering continuing to support resilient booking volumes and robust monetisation dynamics.  

The company’s asset-light business model, disciplined marketing optimisation, and scalable technology infrastructure continue to generate exceptional free cash flow conversion and attractive operating leverage. 

 After experiencing a significant valuation re-rating driven by investor concerns over the potential long-term impact of artificial intelligence on online search and travel discovery, the stock now appears to offer an increasingly attractive long-term risk-reward opportunity relative to its high-quality business profile and earnings resilience. We believe Booking Holdings represents a compelling combination of platform dominance, operational resilience, and durable shareholder return potential within the global consumer internet sector. 

Arista Networks 

Arista Networks has emerged as one of the highest-quality infrastructure beneficiaries of the artificial intelligence investment cycle, leveraging its technology leadership to capture accelerating demand from hyperscale data centres and AI clusters. The ongoing expansion of AI infrastructure is driving a structural increase in demand for high-bandwidth, low-latency networking solutions, where the company maintains strong competitive positioning. At the same time, Arista continues to diversify beyond its hyperscaler customer base through growing exposure to enterprise campus networking, security, and routing solutions, broadening its addressable market and reducing customer concentration risk over time. 

While concerns periodically emerge regarding the sustainability of AI-related capex cycles and increasing competition within networking infrastructure, the company combines strong revenue growth with exceptional profitability metrics, supported by a highly asset-light model, disciplined cost structure, and substantial free cash flow generation. We believe the market continues to underestimate both the duration and scale of the AI networking opportunity, and supported by strong execution, expanding product breadth, and deep customer relationships, Arista remains exceptionally well positioned to compound earnings and shareholder returns over the long term. 

Taiwan Semiconductors Manufacturing Company 

TSMC serves as the critical manufacturing backbone for the world’s leading chip designers. The company’s technological leadership in advanced process nodes, combined with unmatched scale and capital intensity, has created a durable competitive advantage that few competitors are realistically capable of replicating. Deep strategic relationships with key customers including Nvidia, Apple, AMD, and Broadcom continue to reinforce long-term capacity utilisation and revenue visibility. 

While geopolitical tensions surrounding Taiwan remain an important long-term consideration, TSMC’s global manufacturing diversification strategy and critical role within the semiconductor supply chain continue to support its strategic positioning, offering unique exposure to the structural expansion of artificial intelligence and advanced computing demand. 

GE Vernova LLC 

Positioned at the intersection of two of the most powerful secular trends of our time, GE Vernova operates as a focused energy technology platform spanning power generation, grid infrastructure, renewable energy, and electrification solutions. Following its separation from General Electric, the company has rapidly established itself as a critical enabler of the global electrification cycle, with particular exposure to accelerating electricity demand driven by AI-powered data centres and grid modernisation initiatives. Its strong technological capabilities and installed-base advantages across gas turbines, grid equipment, and power management systems place it at the centre of a structurally growing addressable market. 

The rapid expansion of hyperscale AI infrastructure is increasingly creating bottlenecks across electricity generation and transmission networks, driving significant incremental demand across all of GE Vernova’s core business lines. Supported by improving profitability, strong order momentum, and strategic exposure to AI-related power demand, the stock offers a compelling entry point for investors seeking long-term exposure to the global electrification and energy infrastructure investment cycle. 

This analysis was conducted by Cosmin Alexandru Mizof, Investment Manager at Calamatta Cuschieri.  

Navigating investments in 2026 

Markets in 2026 are likely to remain volatile, shaped by geopolitical risks, persistent inflationary pressures, and momentum-driven market dynamics. Rather than trying to predict every macro turn, focusing on high-quality companies with solid earnings power, scalable models, and undervalued entry points may be the best path forward. 

These five picks represent a strategic mix of resilience, global diversification, and future-facing growth potential. Investors are still encouraged to do their own research or seek guidance from an expert advisor to set up their ideal investment portfolio. 

The financial instruments discussed are intended for retail clients however, they may not be suitable for all investors and investors must make their own informed decisions and seek their own advice regarding the appropriateness of investing in financial instruments or implementing strategies discussed herein. The value of the investment may go down as well as up and may be affected by changes in currency. Any performance figures quoted refer to the past and past performance is not a guarantee nor a reliable guide to future performance.  

This information is being provided solely for information purposes and should not be deemed or construed as investment advice, tax, legal, or any other ancillary regulatory advice. CCIS does not accept liability for actions, proceedings, costs, demands, expenses, damages, and losses suffered by persons as a result of information, views, or opinions appearing in this document.  

All investment services are brought to you by Calamatta Cuschieri Investment Services Ltd (CCIS) C13729 which is licensed by the MFSA to undertake investment services business under the Investment Services Act, Cap 370. Calamatta Cuschieri Investment Services Ltd is a member of the Maltese Investor Compensation Scheme. Instruments entrusted with us are covered under the Investor Compensation Scheme Regulations.  

MB and CCIS are both subsidiaries of Calamatta Cuschieri Moneybase plc with their registered address at Level 0, Ewropa Business Centre, Dun Karm Street, Birkirkara, BKR 9034, Malta. 

Why investors are focusing on AI enablers

As the AI theme evolves, markets are becoming increasingly focused on businesses powering the next phase of growth. This includes companies linked to semiconductors, networking equipment, cloud infrastructure, data centres,  and the broader hardware ecosystem required to support rising compute demand. 

Training and deploying large AI models requires significantly higher computing power, greater data storage capacity, and increased energy consumption compared to traditional digital workloads. As a result, infrastructure providers are becoming increasingly central to the AI investment cycle, viewed as key beneficiaries of the significant capital expenditure programmes currently being driven by hyperscale technology firms. 

Hyperscale capital expenditure remains a key driver

Recent earnings releases reinforced this trend, with major technology companies continuing to guide toward elevated AI-related spending. 

According to data tracking Amazon, Alphabet, Microsoft, Meta, and Oracle, hyperscaler capital expenditure as a percentage of operating cash flow has climbed from roughly 15% in 2012 to around 60% in 2025. What is more interesting to observe is the jump in investment since late 2023. This clearly highlights the scale of investment currently being directed toward AI infrastructure and computing capacity. Apart from funding through internally generated cash, hyperscalers have also tapped the bond market to expand their AI investments. 

The consistency of these spending trends continues to support the broader investment case for AI infrastructure, even as parts of the technology sector undergo valuation resets and increased volatility. 

For markets, this matters because ongoing hyperscale investment provides visibility into long-term demand across semiconductors, networking systems, cloud infrastructure, and data centre expansion. 

Large technology firms are competing aggressively to expand AI capabilities, secure computing capacity, and strengthen infrastructure ahead of the next phase of deployment.  

Rather than signalling a slowdown in the theme, the recent market weakness appears to have encouraged more selective positioning within it. 

Valuations are becoming more important again 

The recent pullback has re-introduced a stronger focus on valuations. Following the sharp AI-driven rally, parts of the market had begun trading on increasingly elevated expectations, and the retracement has helped moderate some of that positioning.  

This shift suggests markets are gradually moving toward a more disciplined assessment of which businesses are most directly positioned to eliminate the risk of monetisation, a fear which has hit selective names including some from the big tech. 

Why it matters 

“The current phase of the AI cycle is becoming increasingly focused on infrastructure deployment, capital expenditure visibility, and businesses positioned closest to rising computational demand. With monetisation concerns still present across parts of the AI landscape, companies benefiting directly from AI-related spending through the infrastructure and enabling layer may offer a comparatively lower-risk way to gain exposure to the theme” says Jordan Portelli, Chief Investment Officer at Calamatta Cuschieri Moneybase. 

FAQ 

Which specific sectors or company types are most exposed to the AI infrastructure theme? 

The most directly exposed businesses sit within semiconductors (chips required for model training and inference), networking equipment (high-speed interconnects between servers), hyperscale cloud providers (who both spend on and monetise compute capacity), data centre operators and REITs, and energy infrastructure companies given the significant power demands of AI workloads. 

How can a retail investor get exposure to AI infrastructure? 

Options include direct equity positions in semiconductor or data centre companies, thematic ETFs focused on AI or technology infrastructure, or diversified technology funds with meaningful infrastructure weightings. Investors should assess their risk tolerance carefully, as many of these names carry above-average volatility. 

How long is this capex cycle expected to last? 

Most market estimates suggest the current AI infrastructure build-out has a multi-year runway, driven by the scale of model development, enterprise AI adoption, and sovereign AI initiatives globally. However, the pace of spending is likely to become more uneven as companies shift focus toward demonstrating returns on that investment. 

What is the difference between AI enablers and AI adopters? 

Enablers are businesses that provide foundational infrastructure like chips, servers, networking, and cloud capacity that makes AI possible. Adopters are businesses integrating AI into their products or operations to drive efficiency or revenue. Enablers tend to benefit regardless of which AI applications ultimately win, making them a broader and arguably less risky way to gain exposure to the theme at this stage of the cycle. 

This information is issued by Calamatta Cuschieri Investment Services Ltd (“CCIS”) of Ewropa Business Centre, Triq Dun Karm, Birkirkara BKR 9034, Malta (C13729). CCIS is licensed to conduct Investment Services under the Investment Services Act in Malta by the Malta Financial Services Authority. The value of the investment may go down as well as up and may be affected by changes in currency. Any performance figures quoted refer to the past and past performance is not a guarantee of future performance nor a reliable guide to future performance.  

This information is being provided solely for information purposes and should not be deemed or construed as investment advice, advice concerning particular investments, advice concerning investment decisions, tax, legal, or any other ancillary regulatory advice. There is no guarantee that any forecast or opinion will be realized. The information presented does not take into account your personal circumstances and is provided to You on the express basis that it is not advice, and you may not rely upon it in making any investment decision. Investments in any financial instruments involve risks, you should make your own research before making any investment decisions and should seek the assistance of a financial advisor if in doubt. No person should act upon any opinion and/or information in this document without first obtaining professional advice. CCIS does not accept liability for actions, proceedings, costs, demands, expenses, damages, and losses suffered by persons as a result of information, views, or opinions appearing on this document. 

This equity research examines the company’s operations through its primary strategic areas: 

Accommodation and Travel Reservations 

Booking Holdings’ accommodation platforms, led by Booking.com, provide travellers with access to millions of lodging options across hotels, holiday rentals, resorts, and alternative accommodation. The breadth of inventory and strong global brand recognition remain core to the company’s marketplace advantage. 

Search, Comparison, and Consumer Insights 

Through its meta search brands, including KAYAK, the company offers extensive travel comparison capabilities that allow users to evaluate prices across hundreds of online travel agents and service providers. This segment supports data-driven insights that enhance user experience and inform platform monetisation strategies. 

Dining and Activities

OpenTable and the company’s expanded activities and experiences offerings support deeper integration throughout the travel lifecycle. These services help position Booking Holdings as an end-to-end travel ecosystem rather than a standalone accommodation provider. 

This analysis provides an in-depth view of Booking Holdings’ operational strengths, the evolution of its platform capabilities, and the opportunities presented by its Connected Trip strategy and technology-driven personalisation. The company’s capital-light structure and unified payments infrastructure further reinforce its long-term growth prospects. 

To access the equity research reports, please log in at https://live.moneybase.com/  Once logged in, navigate to the ‘News’ section and select the ‘Research’ tab to view all available research documents. If you don’t have a Moneybase account, download the app to get started. 

This equity research document is issued by Calamatta Cuschieri Investment Services Ltd (“CCIS”) of Ewropa Business Centre, Triq Dun Karm, Birkirkara, BKR9034, Malta (C13729). CCIS is licensed to conduct Investment Services under the Investment Services Act in Malta by the Malta Financial Services Authority. 

Newly issued research recommendations and target prices supersede previously published research. 

The value of the investment may go down as well as up and may be affected by changes in currency. Any performance figures quoted refer to the past and past performance is not a guarantee of future performance nor a reliable guide to future performance. This information is being provided solely for information purposes and should not be deemed or construed as investment advice, advice concerning particular investments, advice concerning investment decisions, tax, legal, or any other ancillary regulatory advice. This content represents the views of the author(s) based upon information believed to be reliable as of the publication date. There is no guarantee that any forecast or opinion will be realized. The information presented does not take into account your personal circumstances and is provided to You on the express basis that it is not advice, and you may not rely upon it in making any investment decision. Investments in any financial instruments involve risks, you should make your own research before making any investment decisions and should seek the assistance of a financial advisor if in doubt. No person should act upon any opinion and or information in this document without first obtaining professional advice. CCIS does not accept liability for actions, proceedings, costs, demands, expenses, damages, and losses suffered by persons as a result of information, views, or opinions appearing on this document. 

Here are some of the main themes addressed in this year’s report.  

Volatile markets, resilient returns 

The global investment landscape in 2025 delivered strong returns, but not without challenges. Equity markets reached record levels despite a notable correction in April, reinforcing the idea that volatility and opportunity often coexist. 

Geopolitical factors were front and centre, particularly U.S. trade policy under President Trump. Uncertainty surrounding tariffs created headwinds early in the year, dampening sentiment. As policy clarity improved, markets regained focus on economic fundamentals. 

Investor confidence recovered as uncertainty faded, with artificial intelligence emerging as the primary driver of equity market gains. 

Changing markets dynamics 

A defining characteristic of 2025 was the transformation in market behaviour. Elevated intraday volatility has become increasingly common. 

Rising retail investor participation, now estimated at 20–25% of overall market activity, contributed to sharper short-term movements. While this environment can be challenging, it also rewards investors who remain disciplined and view excessive volatility as an opportunity rather than a threat. 

Key reflections from 2025 

U.S. growth exceeds expectations 

Despite widespread caution among economists, the U.S. economy once again outperformed. Growth remained stronger than in the euro area, supported by resilient consumer demand even as inflation stayed elevated. 

Artificial intelligence continued to underpin U.S. equity performance and is expected to remain a significant growth driver into 2026, supported by efficiency gains and broader adoption across industries. 

Central banks and policy uncertainty 

The Federal Reserve attracted significant attention amid heightened market swings. President Trump renewed criticism of the Fed’s pace of rate cuts, calling for a more accommodative approach. 

Looking ahead, the anticipated appointment of a new Federal Reserve Chair in 2026 has raised questions around future policy direction and inflation management. 

Europe: Expectations drive performance 

European equity markets also enjoyed a positive year, though gains were largely expectation-led rather than driven by strong economic indicators. In Germany, political developments were influential, particularly the announcement of a €500 billion fiscal initiative spanning 12 years. 

Asia’s mixed performance 

China continued to face economic challenges despite substantial stimulus measures. However, increased openness to foreign investment and progress in AI technologies helped spark a recovery in Chinese equities. 

India emerged as a standout performer, recording economic growth slightly above 8%, even amid the impact of U.S. tariffs. 

Evolving geopolitical landscape 

Progress was observed on several geopolitical fronts. President Trump played a role in securing a ceasefire and initiating peace discussions in Gaza. Additionally, the Russia–Ukraine conflict showed early signs of improvement after three years, supported by U.S.-led mediation efforts. 

Bonds regain momentum 

Bond markets generated positive returns in 2025, with performance led by: 

• Emerging market bonds, benefiting from a weaker U.S. dollar 

• U.S. high-yield bonds, which delivered strong gains 

Investor flows were closely tied to expectations around interest rate cuts, with increased demand in the final months of the year as the Federal Reserve moved to ease policy despite elevated inflation. 

What happened locally? 

Locally, equity markets delivered low to mid-single digit returns, largely driven by large-cap stocks. Liquidity remained limited, and international markets continued to offer comparatively stronger opportunities. 

In contrast, the local bond market remained active, with strong issuance from both new and existing issuers, a trend expected to continue into 2026. 

Currency movements and investor impact 

A major macroeconomic development in 2025 was the depreciation of the U.S. dollar, which weakened by around 12% against the euro. This had a negative impact on euro-based investors with exposure to U.S. assets. 

Concerns over U.S. trade policy, political discourse, and the independence of the Federal Reserve contributed to a reassessment of the dollar’s role as a safe haven. While further weakness remains possible, recent trends suggest currency volatility may be less extreme in 2026. 

Entering 2026 with greater clarity 

Many of the uncertainties that dominated 2025, particularly trade-related concerns, have eased. While markets are entering 2026 with improved visibility, volatility is expected to remain a constant feature. 

Investors are reminded that emotional reactions, such as panic-driven selling, can undermine long-term returns. Ultimately, maintaining exposure over time is more important than attempting to time market movements. 

For a deeper analysis of 2025’s market developments, expectations for 2026, and the investment strategy of Calamatta Cuschieri Moneybase, read the full CIO Insights Report. 

This report was written by our Chief Investments Officer, Jordan Portelli. Jordan holds over 15 years of experience in investment research. He oversees the group’s investment strategy and manages over €250 million in client assets, focusing on fixed income and multi-asset strategies. Jordan has been working with our group since 2016.  

Get guidance on your investments 

Looking to start investing in 2026? No need to do it alone. Our financial advisors are here to help you set up an investment portfolio backed by in-depth research and years of experience.  

You can also invest on your own online through Moneybase, an all-rounded, easy-to-use platform to access over 40 international exchanges, with over 20,000 investment options including stocks, ETFs, bonds, and funds, with a free trade on U.S. exchanges every month.   

This document has been issued by Calamatta Cuschieri Investment Services Ltd (“CC”). CC is licensed to conduct Investment Services in Malta by the Malta Financial Services Authority. This document is prepared for information purposes only and should not be interpreted as investment advice. This document has not been prepared in accordance with legal requirements designed to promote the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. It does not constitute an offer or invitation by CC to any person to buy or sell any investment. No person should act upon any recommendation in this document without first obtaining professional investment advice. Security values may go up as well as down and past performance is not necessarily indicative of future performance, nor a reliable guide to future performance. Currency fluctuations may affect the value of investments and any income derived. This document may not be reproduced either in whole, or in part, without the written permission of CC. CC does not accept liability for any actions, proceedings, costs, demands, expenses, loss or damage arising from the use of all or part of this document. Approved and issued by Calamatta Cuschieri Investment Services Ltd, Ewropa Business Centre, Triq Dun Karm, Birkirkara BKR 9034, Malta. Company registration number C13729. 

In today’s heightened volatility, retail investors might be carried away by emotions, and this is when smart investing is imperative. As predicted in the initial months of this year, 2025 would be a year of volatility which however created a window of opportunities for long-term investors which seek long-term value creation, contrary to rushed and panicked investors which tend to make simple investment mistakes. 

Market overview

Despite market turbulence in the first half of 2025, since Liberation Day markets have rallied strongly, backed by more visibility in terms of the tariff saga.  

Fueled by relentless enthusiasm, AI trade remained the prime focus. This was confirmed by quarter 2 earnings season and more recently in quarter 3 results, showing that hyperscalers remain the key drivers for this trade through massive investments within space. U.S. markets have regained their luster, while emerging markets have also advanced, supported by a softer U.S. dollar. Technology and communication sectors, now virtually synonymous with the “Magnificent Seven”, have spearheaded this surge, leaving traditional value-oriented sectors trailing behind. 

Market dynamics have changed drastically in contrast to the more fundamental traditional approach. The hypersensitive markets today led by the retail segment do create overshoots, ultimately creating selective opportunities. 

Such an environment creates attractive entry points for investors. Nonetheless, fundamental investors are genuinely debating the high valuations and the increasingly narrow market breath, and thus risks remain. While parallels are often drawn to the dot-com era, today’s backdrop is notably different: despite some echoes of past excesses such as vendor-financing dynamics, corporate profitability and cash-generation capacity now operate on an entirely higher level.  

While uncertainty is real, we are entering into a benevolent favorable seasonality period. Statistically, the period from mid-October to the end of the year is traditionally one of the most favorable for equities, with a frequency of gains significantly above average. This tendency is better known as the “Santa Claus rally”.  

How our Spring 2025 Top Picks performed

Last May, we did an analysis of 5 appealing companies thriving amid market volatility.  

Between May and October 2025 global equity markets delivered a notably strong performance with the MSCI All-World Country Index (Net Total Return) advancing by 19.8%. This achievement was particularly impressive given the uninterrupted monthly gains recorded throughout the period. Here’s how these 5 equities performed between May and October. 

Our top pick, Alphabet Inc. initially lagged behind its Magnificent 7 peers, as investor sentiment was dampened by regulatory concerns surrounding its dominant position in internet search. Once the legal outcome turned out to be more favorable than anticipated, the stock rallied sharply. Supported by another exceptional set of third-quarter results, the stock ultimately delivered a remarkable total return of 74.8%, decisively outperforming the broader market.  

The second pick, Alibaba Group Holdings, appreciated in tandem with Chinese equities as investors positioned the Chinese economy as a key beneficiary of progress in US – China trade negotiations. Additionally, the outstanding advances of Alibaba Cloud’s proprietary LLM and multimodal AI suite, Qwen, reinforced the company’s status as a formidable contender in the global AI landscape. The stock recorded an impressive 43.1% total return over the review period.  

While European equities generally underperformed their U.S. counterparts, our selections in the region lagged the benchmark. Adyen, our first European holding, reported top- and bottom-line growth broadly in line with expectations, but disappointed investors with its forward guidance for the remainder of the year. This triggered a market overreaction on the downside, resulting in a modest 5.0% total return for the period. However, in their latest quarter 3 numbers and in the very recent investors’ day, they have given a more benevolent outlook which did push shares notably up by c.8%.  Our second European position, Deutsche Telekom, continued to deliver solid operational results, particularly through its expanding U.S. business, T-Mobile, but in a market environment unfavorable to value-oriented sector, the stock declined by 14.9%. 

Finally, our tactical position in Fiserv proved to be a clear disappointment. The company revised down its long-term growth outlook for its Clover platform and cut its full-year 2025 guidance. In a highly selective market where any reduction in forward guidance is harshly penalized, the stock suffered a markable decline during the period.  

Highlight on 5 thriving companies

Despite turbulent times, some companies are leveraging emerging opportunities to thrive, making them potentially compelling investment options to put on your watchlist. This article puts the spotlight on 5 such companies, derived through the below structured 3-step analysis: 

1. Sectoral screening: A sector-specific screening model is employed, incorporating a range of financial and operational metrics to assess the long-term viability of companies. Firms exhibiting consistently positive trends across these metrics are shortlisted for deeper evaluation. 

2. Financial modelling & common-size analysis: Detailed financial models are developed for selected companies to incorporate historical performance data and include a comprehensive common-size analysis to facilitate cross-sectional and time-series comparisons. 

3. One-year price target estimation: A one-year price target is determined using a Discounted Cash Flow (DCF) approach. The initial Weighted Average Cost of Capital (WACC) used to discount projected free cash flows is tailored for each company. It reflects factors such as the firm’s business model, geographical distribution of sales, functional currency risk-free rate, and outstanding leverage profile. DCF models’ assumptions are regularly benchmarked against the most recent earnings releases from companies.    

BNP Paribas

As a top 5 commercial banking group in the Eurozone, BNP Paribas continues to navigate a complex macroeconomic backdrop marked by persistent monetary policy uncertainty, tightening regulatory requirements, and muted credit demand. Yet beneath these cyclical headwinds, the bank’s diversified business model, anchored by robust corporate and investment banking operations, expanding wealth management, and a solid retail footprint, continues to generate resilient earnings and strong capital returns. Cost efficiency initiatives and disciplined balance sheet management have further strengthened profitability metrics, while capital ratios remain comfortably above regulatory thresholds.  

After a period of valuation compression triggered by heightened uncertainty surrounding the French government crisis, the stock is now trading at a compelling discount relative to its European peers. Supported by a rising dividend stream, an active share buyback program, and a strong capital position, BNP Paribas presents an attractive blend of income resilience and potential for long-term re-rating as the French risk premium gradually normalizes. 

Spotify Technologies

Spotify Technologies faces a mix of near-term headwinds, including rising content acquisition costs, intensifying competition from Big Tech platforms, and market skepticism over its long-term margin potential. However, beneath these concerns, the company’s core growth engines, premium subscriptions, and its rapidly expanding advertising business continue to perform strongly. Recent pricing adjustments improved operating leverage, and disciplined cost control have materially strengthened profitability metrics.  

The company’s focus on product innovation, personalization, and high-margin verticals such as podcasts and audiobooks is steadily enhancing its ecosystem value. After a period of significant re-rating and technical digestion of recent accelerated growth, the stock now offers a compelling entry point for investors seeking exposure to the global leader in audio streaming. With improving margins, growing free cash flow generation, and untapped monetization potential across its vast user base, Spotify’s long-term growth narrative remains firmly intact. 

Amazon.com Inc. 

Amazon continues to operate under several near-term headwinds, including regulatory scrutiny, a mixed macro backdrop for consumer spending, and intensifying competition across both retail and cloud services. Notwithstanding, the company’s core growth pillars, Amazon Web Services (AWS) and its advertising segment remain exceptionally strong, driving margin expansion and robust cash generation. The e-commerce business has benefited from renewed cost discipline, logistics optimization, and a structural shift toward higher-margin third-party and subscription services.  

Following a period of multiple compression and cautious investor sentiment, the stock appears attractively valued relative to its long-term earnings potential. With accelerating AI integration across AWS, continued innovation in fulfillment efficiency, an upcoming holiday season typically strong for its e-commerce business and a vast ecosystem that reinforces customer loyalty, Amazon’s fundamentals and long-term growth trajectory remain compelling.  

Microsoft Corp 

Microsoft Corp. is counting on its key growth engines, Azure, Office 365, and its rapidly expanding AI and cloud infrastructure ecosystem, to deliver exceptional performance. Strategic integration of OpenAI’s models across its product suite is reinforcing Microsoft’s leadership in productivity and enterprise AI adoption. Operating discipline and strong free cash flow generation underpin continued shareholder returns through dividends and buybacks. After a price pullback period driven by expectations of heightened capex spending in the coming years, the stock presents an appealing entry point for investors seeking exposure to one of the most profitable and diversified technology franchises globally. 

MercadoLibre 

MercadoLibre remains the undisputed leader in Latin America’s e-commerce and digital payments ecosystem, supported by a vertically integrated model spanning logistics, fintech, and credit services. This ecosystem continues to deliver strong user growth, rising monetization, and improving operating efficiency across key markets such as Brazil, Mexico, and Argentina. 

After a period of multiple compression driven by broader emerging-market risk aversion, MercadoLibre trades below historical valuation ranges, offering an attractive entry point relative to its long-term growth profile. The stock has recently consolidated around key support levels near its 200-day moving average, suggesting a potential base formation. Combining strong fundamentals, improving profitability, and a favorable technical setup, MercadoLibre offers a compelling risk-reward profile for investors seeking long-term exposure to the digital transformation of Latin America.  

This analysis was conducted by Cosmin Alexandru Mizof, Investment Manager at Calamatta Cuschieri.

Navigating investments in 2025 

Markets in 2025 are likely to remain dynamic, shaped by policy reversals, inflationary shifts, and sector rotations. Rather than trying to predict every macro turn, focusing on high-quality companies with solid earnings power, scalable models, and undervalued entry points may be the best path forward. 

These five picks represent a strategic mix of resilience, global diversification, and future-facing growth potential. Investors are still encouraged to do their own research or seek guidance from an expert advisor to set up their ideal investment portfolio. 

Start investing online – Download Moneybase 

Looking to start investing? Moneybase is an all-rounded, easy-to-use platform to access over 40 international exchanges, with more than 20,000 investment options including stocks, ETFs, bonds and funds, while benefiting from ultra-low currency exchange fees and a free trade each month!  

To get started, open or download the Moneybase app and register for free in minutes. If you need assistance, speak to us through our in-app live chat or contact us on +356 25 688 688, available 7 days a week. Alternatively, you can visit one of our Calamatta Cuschieri Moneybase branches in Fgura, Sliema, Mosta or Birkirkara.

Speak to a financial advisor 

If you need guidance from experts to help you get started with investments, Calamatta Cuschieri financial advisors are here to help. Book an appointment with a financial advisor to get expert guidance on setting up the right investment portfolio for your goals. 

This information document is issued by Calamatta Cuschieri Investment Services Ltd (“CCIS”) of Ewropa Business Centre, Triq Dun Karm, Birkirkara, BKR9034, Malta (C13729). CCIS is licensed to conduct Investment Services under the Investment Services Act in Malta by the Malta Financial Services Authority.

The value of the investment may go down as well as up and may be affected by changes in currency. Any performance figures quoted refer to the past and past performance is not a guarantee of future performance nor a reliable guide to future performance. This information is being provided solely for information purposes and should not be deemed or construed as investment advice, advice concerning particular investments, advice concerning investment decisions, tax, legal, or any other ancillary regulatory advice. CCIS does not accept liability for actions, proceedings, costs, demands, expenses, damages, and losses suffered by persons as a result of information, views, or opinions appearing on this document. No person should act upon any opinion and/or information in this document without first obtaining professional advice. 

Some people tend to solely rely on the pension provided by the government, only to realise way too late that it will not be sufficient to retain their desired lifestyle after their retirement. If you want to keep your current financial liberty and maintain your standard of living during retirement, a private pension plan is the smartest way to secure this for your future. 

Why relying on the Maltese government pension may not be enough 

While the government pension provides a basic income during retirement, it is often insufficient to cover the rising costs, such as water, electricity, groceries, and personal expenses essential to maintain your lifestyle. In Malta, pension income is calculated based on lifetime earnings, meaning that those who do not plan may find themselves with limited financial resources in their later years. 

By supplementing your pension with a private pension plan, you can ensure a more comfortable and stress-free retirement.  

When should you start planning for your retirement 

The earlier, the better! Starting a pension plan early allows you to make more contributions and benefit from compounding, meaning your savings grow significantly over time.  

However, it’s never too late to start. Whether you’re in your 20s, 30s, 40s, or even 50s, making smart financial decisions will set you up for a more financially stable future. 

The benefits of a private pension plan 

Financial security and stability: A well-structured pension plan gives you peace of mind by offering you a reliable income stream when you stop working, to supplement the state pension. 

Tax credit: Claim 25% of the contributions allocated to the pension sub-account as a tax credit against income tax chargeable during the year. 

Lump sum upon retirement: Receive a 30% tax-free lump sum along with the remaining balance upon retirement. 

Compounding investing: The returns generated on your pension plan are reinvested, creating a snowball effect. Compounding benefits long-term investments by generating returns on both the original principal invested as well as the accumulated returns from previous periods, thereby multiplying your initial investment exponentially over the long term. 

Pound-cost averaging: Pound-cost averaging is a strategy where you invest a fixed amount regularly instead of putting in a large lump sum all at once. This approach means you purchase fewer units when prices are high and more when prices are low, helping to smooth out the overall cost of your investment over time. 

Protection against inflation: As the cost of living continues to rise, relying solely on the government pension may be challenging to keep up with inflation. A private pension provides an additional cushion to have greater financial power in retirement.  

A plan you control: Unlike the government pension, which is dependent on government policies and economic conditions, a private pension plan puts you in control. You decide how much to contribute, how to invest, and when to withdraw your funds, giving you more flexibility.  

Maintain your lifestyle: A private pension plan helps bridge the gap between the government pension and the income you need to sustain your current lifestyle. Whether it’s travel, hobbies, or simply living comfortably, planning for retirement now ensures you won’t have to compromise later. 

Start today with retirement planning 

Start planning for your retirement today to retain your lifestyle tomorrow. Our private pension plan is a long-term savings plan designed to help you save for your retirement, including several benefits: 

• A 30% tax-free lump sum along with the remaining balance 
• A tax-efficient and flexible pension plan 
• Saving regularly for your retirement with just a minimum of €25 a month 
• 25% of allocated premiums may be claimed as a tax credit against income tax chargeable during the year 
• Appointment of multiple beneficiaries to receive your pension pot when you pass away 
• Pension plan managed by professionals with decades of experience, to ensure greater returns on your investments 

This information is provided solely for educational and informational purposes and should not be construed as investment advice, advice on specific investments or investment decisions, tax advice, legal advice, or any other form of professional or regulatory advice. Investing in this product involves risk. You should conduct your research before making any investment decisions and seek the assistance of a licensed financial advisor. 

Money invested within the Pension Sub-Account may be eligible for a tax credit and will not be accessible before the age of 61. Such tax credits depend on individual circumstances and their amounts, together with Maltese tax legislation, may change in the future. 

The investment value may go down as well as up, and could also be affected by changes in currency exchange rates. You may lose some or all of the money invested. 

Charges will apply should you surrender the Access Sub-Account or transfer the Pension Sub-Account before the Retirement Date. 

Your decision to invest in this product should be based on the full details within the product documentation, which may be accessed through https://cc.com.mt/pensions/private-pension/  

This Product is manufactured by IVALIFE Insurance Ltd and distributed by Calamatta Cuschieri Investment Services Limited. 

Calamatta Cuschieri Investment Services Limited (C 13729) is authorised under the Insurance Distribution Act, Cap 487, to act as an enrolled Tied Insurance Intermediary for IVALIFE Insurance Limited (C 99404). IVALIFE is authorised under the Insurance Business Act, Cap 403, to carry out long-term business in Malta. Both entities are regulated by the Malta Financial Services Authority. 

Episode 6: Earnings, Equities & Economic Shifts 

In our sixth episode, the hosts explore major developments that are reshaping financial markets: 

Global Tariffs & Market Reactions – How recent US-imposed tariffs triggered sharp volatility, pushing markets into intraday bear territory before rebounding. 

Tech Sector Reset – Why high valuations led to steep declines in AI stocks like Nvidia, and how the team identified new entry points. 

Earnings Season Takeaways – US banks shine while Tesla stumbles; Meta, Amazon and Google post strong growth amid AI investments. 

Interest Rates & Currencies – The outlook for Fed and ECB rate cuts, the euro-dollar exchange dynamics, and the US credit downgrade. 

Stock Picks & Portfolio Positioning – From Spotify and Uber to cybersecurity names like CyberArk and broader ETFs, the team highlights key opportunities. 

Listen to episode 6 and subscribe to the FinFocus podcast

Listen on Spotify

Watch on YouTube

Make sure to subscribe so you never miss an episode. Stay tuned for more expert analysis, investing insights, and market updates in the next episode of FinFocus Podcast. 

What is the FinFocus Podcast? 

Hosted by Alan Cuschieri, Alex Cuschieri, and Jordan Portelli, the FinFocus Podcast breaks down financial topics into actionable insights, helping both seasoned investors and newcomers make informed decisions. Each episode covers key developments in global markets, disruptive technologies like AI, and top investment opportunities. We highly suggest staying up-to-date by subscribing on Apple Podcasts, Spotify or YouTube to be notified when a new episode is out. 

Why follow the FinFocus podcast? 

The financial world moves fast, and keeping up with trends, risks, and opportunities is crucial. Whether you’re a professional investor or just starting your journey, the FinFocus Podcast provides expert perspectives to help you make money simple and stay financially focused. 

How & where to invest? 

To invest in the stock market, you need a trading platform like Moneybase. If you’re confident enough and made your own informative research, you can use the Moneybase platform to trade from as low as €0.50 per trade and get a free trade per month on US exchanges. Download the Moneybase app now. 

If you’re looking for financial advice from experts at Calamatta Cuschieri, you can schedule an appointment with one of our advisors by calling on +356 25 688 688, or by visiting one of the Calamatta Cuschieri Moneybase branches in Fgura, Sliema, Birkirkara or Mosta. 

Podcast recorded on 20/05/2025. The information and opinions presented do not represent and shall not be construed as investment advice, recommendation, or inducement to buy or sell financial instruments. The information presented is general in nature and is not directed to any specific person, and is therefore provided to You on the express basis that it is not advice, and You may not rely upon it in making any investment decision. Investments in any financial instruments involve risks, You should make your own research before making any investment decisions and should seek the assistance of a financial advisor if in doubt. This information is provided for information and educational purposes only and take no account of the investors’ individual circumstances. No member of Calamatta Cuschieri Investment Services Limited accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information or opinions contained herein.  

Calamatta Cuschieri Investment Services Limited (CCIS), C13729, is licensed by the MFSA to undertake investment services business under the Investment Services Act, Cap 370. CCIS’ registered address is at Level 0, Ewropa Business Centre, Dun Karm Street, Birkirkara, BKR 9034, Malta. The information presented shall not be reproduced, redistributed, or copied in whole or in part for any purpose. 

Economic overview 

The current market turbulence is largely a result of policy decisions by the U.S. Administration, particularly around tariffs and trade. These moves have introduced considerable uncertainty and led to weakening sentiment in leading indicators.  

However, because the volatility is self-inflicted, it is also reversible. Markets are hypersensitive to any shift in U.S. tone, and recent signs like the 90-day tariff pause suggest potential room for negotiation, especially with China. 

This environment is creating selective and attractive entry points for investors. While near-term uncertainty is real, any constructive developments in trade or policy reversals could be a powerful catalyst for market recovery. 

Equity markets overview 

Equities have had a turbulent year as the “America First” agenda morphed into a “Sell America” wave. Elevated U.S. valuations corrected as investors reallocated capital to European and Chinese markets, which have outperformed YTD. The tech sector, once boosted by the AI rally, has been hit hard post-DeepSeek, with discretionary and communication names following suit. 

While markets remain fragile and highly sensitive to geopolitical and macroeconomic signals, recent panic-driven selloffs have created tactical opportunities. Volatility levels have reached heights not seen since the pandemic, but unlike 2020, many of these moves seem unjustified on fundamentals. 

Highlight on 5 thriving companies  

Despite turbulent times some companies are leveraging emerging opportunities to thrive, making them potentially compelling investment options to put on your watchlist. This article puts the spotlight on 5 such companies, derived through the below structured 3-step analysis: 

1. Sectoral screening: A sector-specific screening model is employed, incorporating a range of financial and operational metrics to assess the long-term viability of companies. Firms exhibiting consistently positive trends across these metrics are shortlisted for deeper evaluation. 

2. Financial modelling & common-size analysis: Detailed financial models are developed for selected companies to incorporate historical performance data and include a comprehensive common-size analysis to facilitate cross-sectional and time-series comparisons. 

3. One-year price target estimation: A one-year price target is determined using a Discounted Cash Flow (DCF) approach. The initial Weighted Average Cost of Capital (WACC) used to discount projected free cash flows is tailored for each company. It reflects factors such as the firm’s business model, geographical distribution of sales, functional currency risk-free rate and outstanding leverage profile. DCF models’ assumptions are regularly benchmarks against the most recent earnings releases from companies.    

Alphabet Inc. 

Alphabet finds itself at the center of multiple headwinds such as antitrust concerns, AI competition, and capital outflows from U.S. equities. But under the surface, its core growth-driving businesses like Google Cloud and YouTube continue to deliver strong results. 

Cost discipline is improving, and the stock has been heavily repriced, offering an attractive entry point. Even in the event of a DOJ-mandated restructuring, shareholder value could be unlocked from a sum-of-parts valuation. Alphabet’s fundamentals and long-term growth story remain solid. 

Alibaba Holdings 

After a turbulent period in Chinese markets, Alibaba is regaining investor confidence. Economic stimulus, improved government-corporate relations, and a clearer AI strategy are helping the company turn a corner. Its international expansion, particularly via Trendyol, positions Alibaba as more than just a domestic giant.  

While geopolitical and regulatory risks remain, the stock is significantly undervalued relative to peers and offers a powerful rebound opportunity. 

Fiserv 

Fiserv combines finance and technology in a way that is both future-proof and resilient to macro uncertainty. Its recent earnings disappointment was met with an overreaction in the market, opening an attractive entry point.  

As a major player in the infrastructure behind digital payments, Fiserv is set to benefit from long-term trends in fintech adoption. This is a strong tactical play for investors looking to capitalise on near-term volatility. 

Deutsche Telekom 

Deutsche Telekom’s growth is being driven by its stake in U.S.-based T-Mobile. The company is solid across profitability, balance sheet strength, and valuation metrics. It also benefits from insulation against trade disputes and macro shocks.  

As Europe positions for rate cuts ahead of other economies, Deutsche Telekom could offer both yield and upside. 

Adyen 

A European fintech leader, Adyen is scaling rapidly in the global payments space. Factors such as strong institutional backing, exceptional growth in payment volumes, and increasing relevance in the digital economy, put it on our watchlist.  

While more volatile than peers, its fundamentals and market positioning support a strong growth narrative in 2025. 

This analysis was conducted by Cosmin Alexandru Mizof, Investment Manager at Calamatta Cuschieri Moneybase.  

Navigating investments in 2025 

Markets in 2025 are likely to remain dynamic, shaped by policy reversals, inflationary shifts, and sector rotations. Rather than trying to predict every macro turn, focusing on high-quality companies with solid earnings power, scalable models, and undervalued entry points may be the best path forward. 

These five picks represent a strategic mix of resilience, global diversification, and future-facing growth potential. Investors are still encouraged to do their own research or seek guidance from an expert advisor to set up their ideal investment portfolio. 

Start investing today – Download the app 

Looking to start investing? Moneybase is an all-rounded, easy-to-use platform to access over 40 international exchanges, with more than 20,000 investment options including stocks, ETFs, bonds and funds, while benefiting from ultra-low currency exchange fees and a free trade each month!  

To get started, open or download the Moneybase app and register for free in minutes. If you need assistance, speak to us through our in-app live chat or contact us on +356 25 688 688, available 7 days a week. Alternatively, you can visit one of our Calamatta Cuschieri Moneybase branches in Fgura, Sliema, Mosta or Birkirkara. 

Speak to a financial advisor 

If you need guidance from experts to help you get started with investments, Calamatta Cuschieri financial advisors are here to help. Book an appointment with a financial advisor to get expert guidance on setting up the right investment portfolio for your goals. 

Subscribe to FinFocus Podcast 

Stay ahead in the ever-evolving world of finance by subscribing to the FinFocus Podcast by Calamatta Cuschieri Moneybase. Hosted by industry leaders Alan Cuschieri, Alex Cuschieri, and Jordan Portelli, FinFocus delivers expert insights on global and local market trends, disruptive technologies like AI, and smart investing strategies.  

Subscribe today – available on YouTube, Apple Podcasts, and Spotify  

This information document is issued by Calamatta Cuschieri Investment Services Ltd (“CCIS”) of Ewropa Business Centre, Triq Dun Karm, Birkirkara, BKR9034, Malta (C13729). CCIS is licensed to conduct Investment Services under the Investment Services Act in Malta by the Malta Financial Services Authority.  

The value of the investment may go down as well as up and may be affected by changes in currency. Any performance figures quoted refer to the past and past performance is not a guarantee of future performance nor a reliable guide to future performance. This information is being provided solely for information purposes and should not be deemed or construed as investment advice, advice concerning particular investments, advice concerning investment decisions, tax, legal, or any other ancillary regulatory advice. CCIS does not accept liability for actions, proceedings, costs, demands, expenses, damages, and losses suffered by persons as a result of information, views, or opinions appearing on this document. No person should act upon any opinion and/or information in this document without first obtaining professional advice.

The tariff tug-of-war 

While tariffs have officially been imposed, particularly targeting China, their economic logic remains questionable. These tariffs don’t hold up under economic scrutiny. They are likely to be redefined – and not for ideological reasons, but because they lack economic sense. 

President Trump is clearly feeling the heat. That pressure is visible in market indicators like the 10-year U.S. Treasury yield and the U.S. dollar, which have been behaving in unorthodox ways. Typically, in times of uncertainty, investors flock to safety, boosting the dollar and U.S. government bonds. But that’s not what’s happening now. 

Instead, we’re seeing higher yields and a weaker dollar – a market vote of no confidence in current U.S. policies. This kind of divergence is rare for a developed economy and more commonly seen in emerging markets. 

President Trump walks back and markets respond 

After triggering fresh concerns last week by casting doubt over the Fed’s independence, President Trump has since stepped back from any threats to remove the Fed chair, a shift welcomed by markets. Similarly, he hinted at significant tariff reductions, even if not to zero, another signal that reversals may be on the horizon. 

These comments have already prompted stronger market sessions, reinforcing the point that policy tone alone can move markets. 

The time to stick to a plan and not panic 

Now is not the time to panic or pull back. Knee-jerk reactions in times of volatility can lead to missed opportunities, especially on strong rebound days like we’ve just seen. If you’re already in the market, stay the course. If you have liquidity available, consider well-timed entries. 

What we’re witnessing is a self-inflicted market downturn – not a structural collapse. This correction has likely already priced in a mild recession, even though, as the IMF revised, the U.S. economy is now projected to grow at 1.8%, down from 2.7%, but still not a recessionary outlook. 

The chart below shows historical moves in the S&P 500 that only included double-digit losses. Despite these significant pullbacks, the market has historically returned an average of approximately 10% per year. What’s the takeaway from this? It’s the time in the market, and not its timing, that ultimately matters! Remaining invested and focused over the long term remains the most reliable strategy, even during periods of uncertainty.  

Volatility reflects uncertainty, not collapse 

The wild intraday swings we’re seeing reflect heightened uncertainty, not a total collapse in fundamentals. Markets may retest recent lows but they’re also likely overreacting. The reality is that this can all change with a single policy shift – or even a single sentence from the President. 

And if history is any indication, it just might. 

Start investing today – Download the app 

Looking to start investing? Moneybase is an all-rounded, easy-to-use platform to access over 40 international exchanges, with more than 20,000 investment options including stocks, ETFs, bonds and funds, while benefiting from ultra-low currency exchange fees and a free trade each month!  

To get started, open or download the Moneybase app and register for free in minutes. If you need assistance, speak to us through our in-app live chat or contact us on +356 25 688 688, available 7 days a week. Alternatively, you can visit one of our Calamatta Cuschieri Moneybase branches in Fgura, Sliema, Mosta or Birkirkara. 

Speak to a financial advisor 

If you need guidance from experts to help you get started with investments, Calamatta Cuschieri financial advisors are here to help. Book an appointment with a financial advisor from Calamatta Cuschieri to get expert guidance on setting up the right investment portfolio for your goals. 

Book an appointment https://cc.com.mt/contact/ ) 

This information document is issued by Calamatta Cuschieri Investment Services Ltd (“CCIS”). CCIS is licensed to provide investment services under the Investment Services Act in Malta by the Malta Financial Services Authority. The registered address of CCIS is Ewropa Business Centre, Triq Dun Karm, Birkirkara, BKR9034, Malta. 

This information is provided solely for educational and informational purposes and should not be construed as investment advice, advice on specific investments or investment decisions, tax advice, legal advice, or any other form of professional or regulatory advice. The information does not take into account your personal circumstances and is provided to you on the express understanding that it does not constitute advice and should not be relied upon in making any investment decision. Investing in financial instruments involves risk. You should conduct your own research before making any investment decisions and seek the assistance of a licensed financial advisor if you are unsure. No person should act on any opinion or information contained in this document without first obtaining appropriate professional advice. CCIS does not accept liability for any actions, proceedings, costs, demands, expenses, damages, or losses suffered as a result of reliance on the information, views, or opinions expressed in this document. 

Extreme Volatility & the VIX Spike

One of the clearest indicators of market anxiety is the CBOE Volatility Index (VIX), which recently spiked to levels seen last in the COVID19 crisis. While volatility of this magnitude was understandable at the height of pandemic-related uncertainties, the current scenario arguably does not justify such extreme fear. A VIX reading near 60 strongly suggests panic selling is taking place, often driven by emotion rather than fundamentals.

Avoiding Rash Decisions

During periods of heightened volatility, it is tempting for investors to exit the market prematurely. However, given the current climate and the nature of the sell-off, we know that closing positions at these levels could be irrational. Although it’s easy to be swayed by negative headlines, remember that the VIX often reflects fear rather than a permanent shift in market fundamentals.

Political Pressure & the ‘Wealth Effect’

The U.S. administration is under growing scrutiny to take a more measured stance and potentially resolve the notable market turbulence. Tariffs are not only impacting the ‘wealth effect’ due to significant market volatility but will also inevitably impact consumer confidence due to the expected higher inflation. Moreover, political implications might be also a concern for Trump’s administration with mid-term elections on the horizon, neither party can afford to ignore the financial and psychological toll that persistent volatility inflicts on voters.

Deploying Cash Selectively

At Calamatta Cuschieri, we are closely monitoring evolving market conditions and do not rule out deploying available cash in the near term. Several high-quality companies

with strong fundamentals have seen their market capitalisations shaved off at a pace that appears disproportionate to any underlying challenges in their business models. While some valuations, particularly in more speculative segments have been stretched, and therefore took a harder hit, they could also rebound vigorously if a relief rally materialises.

The Importance of Staying Invested

Historically, the best way to benefit from recovery phases has been to remain invested, rather than attempting to time each market swing. It’s crucial to remember that it is the time in the market, not trying to time the market, that ultimately contributes to long-term returns. Missing just a few days of a strong market rebound can dramatically reduce overall performance.

The current market showcases both the unpredictability of global events and the emotional responses they trigger. While the fallout initially affects U.S. consumers and businesses, the rumbling can be felt worldwide. We anticipate that rational policy measures and the natural market mechanisms will help stabilise conditions in due course. Until then, we encourage investors to maintain a disciplined strategy, avoid hasty decisions, and remain focused on the broader horizon.

Calamatta Cuschieri will continue to actively assess market developments and maintain open communication with our clients. If you have any questions or concerns about your portfolio, please reach out to our team of financial advisors.

This information document is issued by Calamatta Cuschieri Investment Services Ltd (“CCIS”) of Ewropa Business Centre, Triq Dun Karm, Birkirkara, BKR9034, Malta (C13729). CCIS is licensed to conduct Investment Services under the Investment Services Act in Malta by the Malta Financial Services Authority.

This information is being provided solely for educational and informational purposes and should not be deemed or construed as investment advice, advice concerning particular investments, advice concerning investment decisions, tax, legal, or any other ancillary regulatory advice. The information presented does not take into account your personal circumstances and is provided to You on the express basis that it is not advice, and you may not rely upon it in making any investment decision. Investments in any financial instruments involve risks, you should make your own research before making any investment decisions and should seek the assistance of a financial advisor if in doubt. No person should act upon any opinion and/or information in this document without first obtaining professional advice. CCIS does not accept liability for actions, proceedings, costs, demands, expenses, damages, and losses suffered by persons as a result of information, views, or opinions appearing on this document.