Market Snapshot - July 2019

Paul Niven

Managing Director, Portfolio Manager and Head of Portfolio Management, Multi Asset Solutions


Equity markets posted positive returns in June, with the US continuing to perform strongly along with cyclically oriented stocks and firms exposed to China. This was aided by Presidents Donald Trump and Xi Jinping reaching a temporary truce on trade following the G20 summit at the end of June in Osaka. Positive momentum was also driven by dovish tones from most central banks globally, following softer global economic data, including weaker-than-expected manufacturing figures and payroll numbers in the US. The US Federal Reserve kept rates on hold at their June meeting but interest rate projections moved lower, with markets now pricing in multiple rate cuts in the US over the remainder of this year.

Eurozone growth remained sluggish, notably in manufacturing; however, there were a couple of brighter points, with French industrial production, and purchasing managers’ index readings in both France and Germany slightly stronger than expected. The European Central Bank (ECB) maintained its dovish tone and kept rates unchanged, with outgoing President Mario Draghi highlighting that further rate cuts and quantitative easing remain part of the ECB toolkit.

In the UK, uncertainty surrounding Brexit and domestic politics remains after Theresa May stepped down as leader of the Conservative Party. The resulting leadership contest will see the winner become both Tory leader and Prime Minister. Following several rounds of voting among Conservative MPs, the final two candidates are Boris Johnson and Jeremy Hunt, with the final vote, which will take place in July, down to registered Tory party members. Johnson, a leader and key figure of the ‘Leave’ campaign, is currently ahead in the polls; however, both candidates have stated that they intend to leave the EU on the 31 October 2019 deadline, increasing the possibility of a ‘no-deal’ exit.

Emerging markets marginally underperformed developed markets in June, but still registered strong gains off the back of positive developments in the trade war dispute, as well as dovish central banks. Chinese equities delivered a strong performance of circa +8%, despite weaker growth readings. 

Despite the recent recovery in equity markets, valuation metrics in a number of areas remain reasonable and, provided that growth remains on a positive path globally, we believe that equities should remain well supported. Nonetheless, the cycle is mature and the bull market in stocks is extended, with outlooks for global growth in 2019 starting to moderate. We expect that volatility will remain heightened in the coming quarters, and we continue to invest in a range of diversified underlying stock selection strategies. We remain well placed to withstand any further short-term volatility in markets. 

All information as at June 2019, unless stated otherwise.

The Company is an investment trust and conducts its affairs so that its shares can be recommended by Financial Advisers to ordinary retail investors in accordance with the Financial Conduct Authority’s rules relating to non-mainstream investment products and intends to continue to do so.

The company is available for retail investors in the UK, professionally advised private clients and institutional investors who seek growth in capital and income from investment in global markets and who understand and are wiling to accept the risks, and rewards, of exposure to equities.

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Past performance is not a guide to future performance. The value of all stock market investments can go down as well as up and you may not get back the full amount originally invested. If you feel you need specific investment advice that takes your individual circumstances fully into account, please talk to a financial adviser. The value of directly held property will reflect the valuations determined by professional independent valuers. Such valuations are the opinion of valuers at a particular time and are likely to be revised. Property and property-related assets can sometimes be illiquid.