Monthly Market Commentaries

October was a volatile month for markets, with equities falling after an initial rally and only a few markets ending up with a positive return. In Sterling terms, the US was the most notable performer. Global bond markets produced marginally positive returns as yields fell.

August was a volatile month, but in general, global equities gained. Markets were initially impacted by disappointing US economic data, together with an interest rate hike by the Bank of Japan.

Overall global equities gained in July, with the best performing markets being Japan and the UK. However, emerging and Asian markets struggled. Furthermore, the best returns were achieved by companies that were value oriented and smaller in nature, which subsequently outperformed larger growth companies

Asian and emerging markets performed strongly in Q2 2024 and subsequently outperformed developed markets. Stocks related to Artificial Intelligence (Al) also continued to perform strongly. The European Central Bank (ECB) cut interest rates, but persistent inflation meant that other major central banks, such as the US Federal Reserve (Fed) and the Bank of England (BoE), kept interest rates on hold. In aggregate, global bond yields rose over Q2, which meant prices fell.

Ongoing investor optimism about the economic outlook was supportive to most risk assets in May. Developed market equities rose in May and outperformed emerging markets.

Investors also now anticipate that US interest rate cuts may come later than in other regions, such as Europe and the UK. Despite investors continuing to anticipate interest rate cuts, bond yields, in general rose, which led to a fall in price. However, there was regional divergence in bond markets, with some markets seeing gains.

With the exception of the UK, developed market equities fell in April as market expectations of interest rate cuts in the US receded. However, Emerging market equities, including China, produced positive returns in April. Global bond prices fell as yields rose.