Podcast Summary: Equity Markets Finish a Turbulent March with a Solid Rebound
Podcast: Moving Markets (Julius Baer)
Host: Helen Frear
Date: April 1, 2026
Episode Overview
This episode provides a comprehensive recap of major market developments as March concludes—a month marked by heightened volatility, geopolitical tensions, and powerful market swings. Helen Frear is joined by Julius Baer experts Lucia Caculovic, Dario Messi, and Matthia Rashita, who share insights on equities, bonds, commodities, and the broader global context, including the latest economic data and emergent investment themes.
Key Discussion Points & Insights
1. March Market Recap & Drivers of Volatility
Speaker: Lucia Caculovic
[00:37–07:09]
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European Equities:
- Stoxx 600 rebounded nearly 0.5% on the month’s final day but closed March down nearly 8%, its worst performance in over three years.
"Despite that bounce, March ended with a nearly 8% decline for the Stoxx 600, its worst monthly performance in over three years." — Lucia Caculovic [00:49]
- Ongoing anxieties tied to Middle East tensions fueled uncertainty.
- Stoxx 600 rebounded nearly 0.5% on the month’s final day but closed March down nearly 8%, its worst performance in over three years.
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Inflation Surprises:
- Eurozone inflation hit 2.5% in March (vs ECB’s 2% target), worsened by rising global energy prices driven by geopolitical events.
"Preliminary figures show Eurozone inflation jumping to 2.5% in March, significantly exceeding the ECB's 2% target." — Lucia [01:28]
- Eurozone inflation hit 2.5% in March (vs ECB’s 2% target), worsened by rising global energy prices driven by geopolitical events.
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US Equities Rally:
- Dow surged over 1,100 points (+2.5%), S&P 500 up 2.9%, Nasdaq +3.8%, spurred by hopes for a Middle East de-escalation and promising comments from global leaders.
"Optimism regarding a potential easing of tensions in the Middle East was the primary catalyst." — Lucia [02:09]
- Tech stocks led the rally; “the max 7” up 4.5%. Nasdaq remained in correction territory, down 10% from recent highs.
- Dow surged over 1,100 points (+2.5%), S&P 500 up 2.9%, Nasdaq +3.8%, spurred by hopes for a Middle East de-escalation and promising comments from global leaders.
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Mixed US Economic Data:
- March consumer confidence improved, but job openings and hiring softened. Inflation worries persisted among households.
"Conflicting indicators suggest a complex economic environment." — Lucia [03:02]
- March consumer confidence improved, but job openings and hiring softened. Inflation worries persisted among households.
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Asset Class Performance:
- Equities declined significantly.
- US high yield bonds marked their first quarterly loss since 2022 (–1.1%), led by rising yields and tech sector concerns.
- Gold, traditionally a haven, suffered its largest monthly drop in 17 years due to higher rate expectations driven by energy prices.
"Gold...experienced its largest monthly decline in almost 17 years." — Lucia [04:09]
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Commodities:
- Oil prices volatile: Brent traded above $118 (5% higher on the day), WTI also up.
"This is mainly because there are some contradicting signals coming in. We see escalating attacks, while the rhetoric suggests we could see an end soon." — Lucia [04:32]
- Oil prices volatile: Brent traded above $118 (5% higher on the day), WTI also up.
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Corporate News:
- Unilever in advanced merger talks with McCormick for its food business (~$15.7bn deal), with shareholder equity involved. Shares dropped 7% on announcement.
- Global hiring pause at Unilever amid Middle East conflict.
"The market reacted negatively, with Unilever's shares closing down over 7% yesterday." — Lucia [05:02]
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Asia Market & Economic Data:
- Japanese equities rose sharply (+5%), South Korea’s Kospi up nearly 10% after upbeat Bank of Japan Tankan survey.
- Chinese manufacturing PMI cooled to 50.8, missing expectations.
"The Bank of Japan's Tankan survey...revealed increased optimism amongst large Japanese manufacturers." — Lucia [05:55]
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Today’s Data Preview:
- European manufacturing PMIs, Eurozone unemployment.
- US: ADP employment, retail sales, ISM manufacturing PMI.
2. Fixed Income & Credit Markets
Speaker: Dario Messi
[07:13–11:21]
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Corporate Credit Health:
- Despite volatility, corporate bond spreads remain tight by historical standards.
"The corporate bond market still pretty well behaved...the market does not really discount here major adverse economic outcomes from here." — Dario [07:39]
- Default rates are expected low or declining, with solid credit fundamentals and improved market quality.
- Despite volatility, corporate bond spreads remain tight by historical standards.
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Market Access & Issuance:
- Record volumes for investment grade primary issuance show firms’ ability to refinance remains intact.
- Slight softening visible only for longer-dated or riskier bonds (high yield, EM), mostly reflecting a sentiment shift among retail investors.
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Private Credit Risks:
- No signs of systemic risk to the banking system or broader markets from private credit, despite headlines.
"We don't see any off balance sheet risks or counterparty risks which are very worrisome at this point in time." — Dario [10:05]
- No signs of systemic risk to the banking system or broader markets from private credit, despite headlines.
3. Equity Markets Outlook
Speaker: Matthia Rashita
[11:27–16:14]
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Geopolitics & Market Volatility:
- Equities saw sharp swings and five consecutive weeks of decline, now punctuated by sudden rallies on hopes for de-escalation in the Middle East.
"We have witnessed very sharp swings in equity markets lately...what really stands out is how quickly the narrative can flip." — Matthia [11:41]
- Sector rotation evident: Tech/cyclicals lead rebounds, defensives and energy lag as tensions appear to recede.
- Equities saw sharp swings and five consecutive weeks of decline, now punctuated by sudden rallies on hopes for de-escalation in the Middle East.
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Strategic Positioning:
- No rush to raise equity exposure due to high uncertainty; not a “typical” shock, with unpredictable outcomes.
"It's still too early to turn more constructive...so from a positioning perspective...use periods of US outperformance to gradually rotate further into non-US equities." — Matthia [12:54]
- No rush to raise equity exposure due to high uncertainty; not a “typical” shock, with unpredictable outcomes.
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US vs Non-US Equities:
- US equities have appeared resilient due to lower energy exposure but this is likely transitory. Advocates for increased global diversification.
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Emerging Markets Resilience:
- EM equities fell about 13% in March, only slightly underperforming developed markets, with fundamentals (earnings revisions) holding up.
"The downside has been largely driven by sentiment rather than fundamentals." — Matthia [14:06]
- Resilience due to stable earnings, supportive macro backdrop, and key roles in global AI supply chains.
- EM equities fell about 13% in March, only slightly underperforming developed markets, with fundamentals (earnings revisions) holding up.
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Investment Outlook for EM:
- Overweight stance on EM equities remains, anchored by robust earnings, macro tailwinds (expected oil price stabilization, weaker US dollar, anticipated Fed cuts), and structural growth.
"Our base case assumes oil peaks around 110 US dollar per barrel with only limited economic impact by the US DOL expected to weaken again by around 8%. And the Fed is also expected to deliver two more rate cuts this year." — Matthia [15:10]
- Overweight stance on EM equities remains, anchored by robust earnings, macro tailwinds (expected oil price stabilization, weaker US dollar, anticipated Fed cuts), and structural growth.
Notable Quotes & Memorable Moments
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On the speed of sentiment shifts:
"What really stands out is how quickly the narrative can flip." — Matthia Rashita [11:41]
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On gold’s dismal month:
"Gold...experienced its largest monthly decline in almost 17 years." — Lucia Caculovic [04:09]
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On systemic risk:
"We don't see any off balance sheet risks or counterparty risks which are very worrisome at this point in time." — Dario Messi [10:05]
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On staying patient with equities:
"Rather than chasing short term rebounds...use periods of US outperformance to gradually rotate further into non-US equities." — Matthia Rashita [12:54]
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Emerging markets in the AI supply chain:
"Emerging market equities, particularly in Asia, are deeply embedded in the global AI supply chain and continue to benefit from the CapEx cycle linked to artificial intelligence." — Matthia Rashita [15:10]
Important Timestamps
- [00:49] – European equities' punishing March, linked to Middle East anxieties
- [01:28] – Eurozone inflation overshoots expectations
- [02:09] – US equity rally triggered by de-escalation hopes
- [03:02] – Mixed US economic signals: confidence up, hiring down
- [04:09] – Gold suffers worst monthly drop in 17 years
- [04:32] – Oil price volatility amid contradictory Middle East signals
- [05:02] – Unilever/McCormick merger, Unilever hiring pause
- [05:55] – Strong rallies in Asian stocks; Bank of Japan optimism
- [07:39] – Corporate credit “well behaved” despite market stress
- [10:05] – Private credit issues "not systemic"
- [11:41] – Equity market narrative flips rapidly, driven by geopolitics
- [12:54] – Too early to turn constructive on equities; rotate into global exposure
- [14:06] – Emerging market resilience: sentiment-driven downturn with strong fundamentals
- [15:10] – EM equities' core thesis: solid earnings, macro tailwinds, AI supply chain roles
Conclusion
This episode is a must-listen for investors seeking clarity amid market turbulence, with Julius Baer experts offering nuanced takes on how geopolitics, inflation, and central bank policy are interacting across asset classes. Their consensus: volatility is set to remain, patience is key, and selective global and EM diversification offer attractive opportunities as the year unfolds.