Economic Views

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.

08/04/2016

  • 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 stabilized 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.

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The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.