In the latest edition of our monthly report:
Editorial - by Kim Muller, our CIO
When markets correct some excesses
Demand for collectibles normalizes;
Equity markets are doing the same; and
Currencies are not left out.
What consequences can we expect for the markets?
Trends in vogue in 2023 and 2024, such as long Mag7 or short JPY against USD, are being seriously challenged. There's nothing wrong with that, as the market can't live with certain imbalances indefinitely. Investors take on speculators.
Assessment of the economic situation
The US economy is showing signs of weakness, while in Europe and China, the slight improvement seen in the spring is fading. On the political front, Biden (finally) throws in the towel, while in France question marks are raised.
US job market continues to normalize;
Copper, a leading indicator of the economy, stabilizes; and
China eases (slightly) monetary conditions.
What about the SNB's monetary policy?
The SNB has just announced a "loss" of 2 billion in the second quarter but ended the first half of the year with a positive result of 56.8 billion. The franc's rebound since May penalized its accounts towards the end of the half-year, but fiscal 2024 should remain a good vintage in spite of everything. The latest political and economic setbacks in France have rekindled investors' fears, but above all the appeal of the Swiss currency as a safe haven. Again, and again...
Financial markets during the month
US technology stocks suffer from profit-taking, while the rest of the US stock market regains favour with investors. The bond market pushes yields down and the yen rebounds strongly.
US equities maintain their outperformance;
US Treasury yields fall sharply; and
The yen wakes up aer months of weakness.
Comments on investment decisions
After peaking at the beginning of the month, the positive momentum in the equity markets is waning, with some wondering about future returns from massive investment in artificial intelligence. The Fed is maintaining the status quo, but should (finally) begin its easing cycle in September, as the US economy slows down.
Equities;
Bonds;
Precious metals, listed real estate (REIT); and
Currencies.
Performance summary
Equity performances, and
Performance of bonds, currencies and commodities.
Upcoming event
Disclaimer
This document has been prepared using sources believed to be reliable but should not be assumed to be accurate or complete. The statements and opinions it incorporates were formed after careful consideration and may be subject to change without notice. The author and distributors of this document expressly disclaim any and all liability for inaccuracies it may contain and shall not be held liable for any damage that may result from any use of the information presented herein. Past performance is not indicative of future results. Values of an investment may fall as well as rise. This document is intended for information purposes only and should not be construed as a recommendation, an offer or the solicitation of an offer to buy or sell any investment products or services. The use of any information contained in this document shall be at the sole discretion and risk of the user. Prior to making any investment or financial decisions, an investor should seek individualized advice from his/her financial, legal and tax advisors that consider all of the particular facts and circumstances of an investor's own situation.
DIFC: This document is directed at Professional Clients as defined under the rules and regulations of the Dubai Financial Services Authority (DFSA). Probus Middle East Limited is regulated by the DFSA.
Switzerland: This document is directed at Professional Clients and/or Qualified Investors as defined under the rules and regulations of the Swiss Financial Market Supervisory Authority (FINMA). Pleion SA is regulated by the FINMA.
Mauritius: This document is directed at Professional Clients and/or Qualified Investors as defined under the rules and regulations of the Financial Services Commission (FSC).
Luxembourg: This document is directed at Professional Clients and/or Qualified Investors as defined under the rules and regulations of the Grand-Duchy of Luxembourg. Clients’ data is protected under the REGULATION (EU) 2016/679 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation).
Data Privacy Policy Important Notice: Companies within the Probus Pleion Group recognize the importance of keeping the personal data of its customers and other counter-parties confidential and protecting their privacy rights. While each company within the Probus Pleion Group has its own privacy policy in accordance with the applicable standards, you may access Probus Pleion Group global privacy policy at the following URL: https://www.probuspleion.com/data-protection-policy
Comments