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Our monthly portfolio positioning commentary.
Equities experienced a volatile December, with developed markets underperforming emerging markets. US equities sold off as a result of the more hawkish tone from the US Federal Reserve and the political instability in France and South Korea, impacted European and Asian equities respectively. Whilst Asian markets on the whole declined, Chinese equities outperformed its peer group as investors reacted well to the Central Government’s commitment to stabilising both the equity and property markets. Furthermore, rising bond yields in the US and European nations lead to falling bond values.
The US stock market rose sharply in November as investors considered the implications of the clean sweep Republican US election victory. Outside of US markets, the election results were met with some caution, mainly due to the threat of a fresh round of tariffs being imposed. This was most impactful on emerging markets and specifically in China, where equities declined due to concerns about a potential trade conflict with the US and negative investor sentiment towards the government’s economic support measures introduced to revive the econom
In October, financial markets were volatile despite robust economic data from the US. Equities on the whole delivered negative performance, with US equities performing the best among developed markets. Weaker-than- expected earnings from Apple, Meta, and Microsoft impacted US equity performance, while European equities under-performed due to weaker corporate earnings reports. Emerging market equities faced challenges, mainly driven by Indian, and to a lesser extent, Chinese, equities.
Fixed income assets struggled over the month, with bonds selling off as yields rose. However, gold rallied to a new high.
In September, equity markets faced challenges but recovered due to a pick-up in macroeconomic data and expansionary monetary policy, which alleviated recession concerns. Both the US Federal Reserve and the European Central Bank (ECB) delivered rate cuts of 0.5% and 0.25% respectively. Additionally, positive momentum in China helped contribute to global equity performance. Global equities ended the month in positive territory.
August was a positive, but volatile month for bonds and equities. At the start of the month, the interest rate rise in Japan and weak economic data in the US, initially led to equity markets selling off, which was also further impacted by the political uncertainty around the US presidential election.
July was a volatile period for equity markets. Weaker economic data from the US including inflation, employment reports and the manufacturing / services surveys led to increased anticipation that the US Federal Reserve is likely to cut rates at the September meeting. Additionally, we saw corporate earnings results surprise to the downside for some companies, which drove some underperformance within equities and the Magnificent 7, which have driven positive market performance so far this year
June saw mixed performances for financial markets, with US equities continuing to increase, aided by the the continued performance of the “Magnificent 7”. Emerging Market equities were slightly up over the period, driven largely by India and Taiwan’s strong performance . However, in Europe, we saw political developments come into focus with European parliamentary elections and snap legislative elections in France, which caused a subsequent fall in European equities.