Monthly markets review - July 2016
An overview of markets in July 2016 when equities recovered from the Brexit-induced sell-off and emerging markets outperformed.
- Equity markets recovered following June’s Brexit-related sell-off as investors were reassured by the accommodative rhetoric from central banks and prospects for fiscal stimulus.
- US equities advanced against a backdrop of mixed macroeconomic data and some strong quarterly earnings, particularly from the technology sector.
- Eurozone equities posted positive returns, supported by some good corporate results and reassuring macroeconomic data. Banks continued to dominate the headlines ahead of the month-end stress tests.
- UK equities gained as the political picture stabilised following the Brexit vote with Theresa May becoming the new prime minister.
- Japanese equities gained despite a stronger yen over the month. Expectations grew surrounding the prospect of increased fiscal stimulus.
- Emerging markets outperformed amid expectations that the supportive liquidity environment was set to continue. Brazil generated a solid gain although China lagged.
- In fixed income, US and UK sovereign bond yields continued to fall.