Global markets rallied strongly in June, reporting one of the best months in nearly a decade (MSCI ACWI +6.4%). After a breakdown in the relationship between the US and China last month threatened global growth, this month saw both parties agree to further negotiations, easing concerns of escalation. The month also saw global central banks lean towards a more accommodative stance on monetary policy after economic data disappointed, supporting asset prices. China led markets with the CSI 300 (9.0%) benefiting from the break in trade tensions, followed by both US indexes; the S&P 500 (8.2%) and the Nasdaq (6.6%). Europe also pushed higher (MSCI-EU ex-UK, +2.7%) following ECB remarks, while the UK (FTSE, -2.8%) and Asia-ex China were lower.

Domestically, the S&P/ASX 200 Accumulation Index was up 3.70% in June, lagging most global markets. Materials (6.1%) was the best performing sector, led by gold miners who were up circa 20% on the back of geopolitical and currency bets. Industrials (4.6%) also outperformed after comments from the US Federal Reserve indicated that monetary stimulus was likely, prompting markets to become more bullish on the outlook for global growth. Consumer Discretionary (-1.5%) was the worst performer in the Index as consumer spending continued to be weak, leading to a number of downgrades in the sector. Information Technology (1.1%) also lagged, unable to match the performance of its international peers.

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Original source: Motor Trader E-Magazine (Aug 2019)

10 Aug 2019