Quarterly Outlook
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July market performance: Summer vibes in stock markets
Market Rewind
Søren Otto Simonsen
Senior Investment Editor
Summary: July is for many a time to kick back, enjoy life with friends and family and push worries aside. That seems to be the chosen path for financial markets too. Stock performance across the board was positive for the month, seemingly taking a positive stance towards the potential of continued interest rate hikes from central banks.
Global equities climbed 3.3% in July and thus posted positive returns for the second month in a row. The positive performance is broadly based as all regions ended the summer month in green.
US 3.1%
The US stock market, here visualized by the S&P 500 index, increased more than 3%. The performance comes on the back of a US stock market where lower inflation and sturdy economic growth creates a good environment for equities, even though there’s still a lot of focus on what the Fed’s approach will be to interest rates. Especially after an unexpectedly hot US GDP figure.
Europe 1.9%
Europe comes in as the lowest performer, albeit still returning 1.9%. This indicates a holding position for the region, due to lower inflation and slower business activity, and a European Central Bank that turns to data to decide whether to hike interest rates further.
Asia 4.6%, Emerging Markets 5.8%
Asia and Emerging Markets returned more than four and five percent respectively. While there’s a variety of reasons for these moves, two highlights are a lower dollar, which is clear from the infographic further down on this page, and a combination of strong earnings and a hope for stimulus in China and Hong Kong.
Energy leads sectors in terms of July performance, increasing with 6.4%. One factor in this is the oil price rebounding (as clear further down on this page), which is caused by supply constraints as well as an improving economic outlook. Communication Services climbed a bit more than 6% as the second-best performing sector. This counts Facebook parent, Meta, among its most prominent companies, which posted strong earnings last weeks.
Global bond performance ended close to a push with sovereign bonds falling slightly and corporate bonds increasing 0.64%.
Check out the rest of this month’s performance figures here:
Sources: Bloomberg and Saxo
Global equities are measured using the MSCI World Index. Equity regions are measured using the S&P 500 (US) and the MSCI indices Europe, AC Asia Pacific, and EM respectively. Equity sectors are measured using the MSCI World/Sector] indices, e.g., MSCI World/Energy. Bonds are measured using the USD hedged Bloomberg Aggregate Total Return indices for total, sovereign, and corporate respectively. Global Commodities are measured using the Bloomberg Commodity Index. Oil is measured using the next consecutive month’s WTI Crude oil futures contract (Generic 1st CL Future). Gold is measured using the gold spot dollar price per ounce. The US Dollar currency spot is measured using the Dollar Index Spot, measuring it against a weighted basket of the following currencies: EUR, JPY, GBP, CAD, SEK, and CHF. Unless otherwise specified, figures are in local currencies.
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