Summer Market Outlook 2024
- philmather5
- Jul 4, 2024
- 2 min read
Global equity markets have continued their strong run, powered by growth in the US. Most of the companies in the S&P 500 exceeded their earnings targets in the second quarter as economic growth and consumer demand remain robust. Investor interest in artificial intelligence (AI) that helped giant US tech stocks to record further big gains as Nvidia, Alphabet, Meta and Microsoft were joined by Apple and some of the smaller semiconductor stocks in the AI rally.
UK stocks have produced substantial gains as a combination of slowing growth and rising commodity prices lifted share prices. Emerging markets benefited from demand for Indian equities as investors seek exposure to strong economic growth there. Economic news from China has been mixed but an increase in consumer demand and in manufacturing helped boost Chinese stocks. European equities initially performed well, but the uncertainty caused by a strong showing by far-right parties in the elections to the European parliament caused markets to fall after a snap general election was called in France. Japanese stocks declined and this was compounded by the decline of the yen against UK sterling.
Fixed-income markets experienced more volatility. Sticky inflation meant any expectations of early interest rates cuts were dashed and forecasts had to be revised as several central banks warned that rates may have to be kept high. However, the European Central Bank and the Bank of Canada both cut rates in June and slowing economic activity in the UK and US helped UK government and corporate bonds to rally towards the end of the quarter. The news has been as turbulent as ever in these past few weeks, and the markets have reflected as much, especially the movement of the pound's value lately.
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This post is the opinion of Velarium Wealth and contains a document produced by FE Investments that we feel is relevant at the current time. This document has been prepared for general information only and is not guaranteed to be complete or accurate. It does not contain all of the information which an investor may require in order to make an investment decision.
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