July proved to be a highly volatile month for many equity markets with the MSCI All Country World Index (a broad measure that tracks the share prices of companies across the globe) finishing the month down -1.3%. Once again, hostilities in Iran and huge swings in sentiment towards AI related stocks were at the centre of the action.
In Iran, a resumption in hostilities pushed Brent crude oil prices temporarily above $100 a barrel before falling back towards $90 towards the end of the month. This helped push the Bloomberg Commodity Index, a broad measure of global commodity prices, up +7.6% over the month in GBP hedged terms. The rise in energy prices also restoked fears of future inflation and, although the UK, EU and US all kept interest rates unchanged, fears of the need for future rate rises sent the Bloomberg Global Aggregate Index of global fixed interest securities down -1.0% in GBP hedged terms. Longer-dated bonds, whose prices are more sensitive to interest rate moves, fell even more.
In equities, we observed huge volatility in the shares of many technology-related shares driven by concerns over the returns that may be achieved on record AI spending and questions over how quickly those investments will pay off. In some markets, like Korea, this volatility was elevated by the prevalence of Exchange Traded Funds designed to use borrowing to double or triple the daily movement in share prices. Despite a huge final day bounce, the MSCI Emerging Markets Index ended the month down -4.4%. In the US, the tech-heavy Nasdaq 100 index was down -7.9% over July. However, Microsoft made market history as the software leader added $450 billion of market value in one day, the biggest ever one-day gain by a single stock, on surging cloud revenues.
Closer to home, it was announced the UK economy grew 0.1% in May, better than expected, with growth of 0.7% over three months, among the fastest in the G7 group of seven major economies. UK inflation data also came in slightly lower than expected, which may be temporary if energy prices stay elevated, although was still welcome news for new Prime Minister, Andy Burnham. Despite uncertainty over the future tax and spending regime under the new PM, the UK equity market was one of the best performing equity markets over July, rising +3.7%.
All performance figures are stated in Sterling terms unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this material is for information only and is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete.
Home / News / Market commentary / YOU AM market commentary: July
YOU AM market commentary: July
July proved to be a highly volatile month for many equity markets with the MSCI All Country World Index (a broad measure that tracks the share prices of companies across the globe) finishing the month down -1.3%. Once again, hostilities in Iran and huge swings in sentiment towards AI related stocks were at the centre of the action.
In Iran, a resumption in hostilities pushed Brent crude oil prices temporarily above $100 a barrel before falling back towards $90 towards the end of the month. This helped push the Bloomberg Commodity Index, a broad measure of global commodity prices, up +7.6% over the month in GBP hedged terms. The rise in energy prices also restoked fears of future inflation and, although the UK, EU and US all kept interest rates unchanged, fears of the need for future rate rises sent the Bloomberg Global Aggregate Index of global fixed interest securities down -1.0% in GBP hedged terms. Longer-dated bonds, whose prices are more sensitive to interest rate moves, fell even more.
In equities, we observed huge volatility in the shares of many technology-related shares driven by concerns over the returns that may be achieved on record AI spending and questions over how quickly those investments will pay off. In some markets, like Korea, this volatility was elevated by the prevalence of Exchange Traded Funds designed to use borrowing to double or triple the daily movement in share prices. Despite a huge final day bounce, the MSCI Emerging Markets Index ended the month down -4.4%. In the US, the tech-heavy Nasdaq 100 index was down -7.9% over July. However, Microsoft made market history as the software leader added $450 billion of market value in one day, the biggest ever one-day gain by a single stock, on surging cloud revenues.
Closer to home, it was announced the UK economy grew 0.1% in May, better than expected, with growth of 0.7% over three months, among the fastest in the G7 group of seven major economies. UK inflation data also came in slightly lower than expected, which may be temporary if energy prices stay elevated, although was still welcome news for new Prime Minister, Andy Burnham. Despite uncertainty over the future tax and spending regime under the new PM, the UK equity market was one of the best performing equity markets over July, rising +3.7%.
All performance figures are stated in Sterling terms unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this material is for information only and is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete.
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