Stock markets posted good gains last week to round off the quarter. Much of the rise came at the end of the week, following news of US inflation coming in at its lowest level since April 2021. This made for gains of about 3.7% for the quarter as a whole for global share markets which takes their gains for the first half of the year to just over 9%. This week is pretty quiet when it comes to scheduled data, with US jobs data the key event before the data flow starts picking up as we move into next week and beyond.
Last week
- Stock markets posted strong numbers to round off the quarter, with European and US shares leading the way last week.
- US stocks got a boost from lower inflation numbers.
- US and Japanese share markets both posted the best gains for the second quarter.
- Government bonds sold off last week as equities rallied.
This week
- US jobs data (payrolls) on Friday is likely the biggest scheduled event this week. Economists surveyed by Bloomberg are expecting to see 225,000 jobs to have been created in June and for the unemployment rate to tick down to 3.6%.
- UK business survey data (S&P Global PMIs) are released on Wednesday (all are expected to remain in “expansionary” territory).
- It’s otherwise a fairly quiet week, with the US markets shut tomorrow for independence day and most of the key data releases not starting until the 2nd week of the month.
Equity returns are in GBP, Oil is in USD. Gold is shown in GBP. Bond returns are all shown in GBP. Source Bloomberg.
Last week in more detail
- Last week saw stock markets post some strong numbers to round off the quarter. European and US share markets were amongst the best performers (up by 2.4% and 2.2% respectively), with UK share markets up by 1.1%. European shares were boosted by some positive news around inflation, with annual inflation in the Eurozone coming down for a 3rd consecutive month to 5.5% in June (from 6.1%) which was a greater decline than the market had been expecting. The US share market was also boosted by news of lower inflation data, with the PCE (Personal Consumption Expenditures) index coming in at 3.8% which is its lowest level since April 2021. In addition to this, there were also some signs of strength in the US housing market, with new home sales coming in at their fastest pace since February 2022.
- The UK FTSE All Share rose by 1.1% on the week, with the domestically focussed FTSE 250 index driving gains; it rose by 2% on the week. This push higher came despite comments from Bank Governor Bailey saying that interest rates are likely to stay higher for longer than financial markets expect.
- In terms of the quarter as a whole, global share markets rose by about 3.7%, with UK shares falling by about 0.6%. The US and Japanese markets were the 2 best performers, with both markets up over 11% for the year-to-date. The US gains have been driven in large part by the technology sector (up over 30% ytd), with Japanese gains more broad based. Friday saw Apple close out the quarter with a market capitalisation of over $3 trillion, which is a first for a publicly traded company and represents a 42% gain ytd.
- For the year-to-date in aggregate, global stock markets are now up c9.5%. Much of the gains have come from very large companies in the US, with Japanese companies (NB just a 6% weight in the global share index) also helping to drive gains.
- Government bond markets sold off a touch as equities rallied. UK gilts fell by about 0.1% on the week, with UK Corporate bonds down by about 0.6%. Global high yield markets continued their strong run, rising by about 0.6% on the week to take gains for the quarter to 1.7%.
- UK 10-year bond yields closed out the quarter yielding 4.38%, with UK investment grade credit bonds yielding 6.64%; the highest level that they’ve been at this year. The UK yield curve (like the US) remains heavily inverted (short-dated bonds yield more than long-dated bonds) and is one of the reasons why we favour shorter-dated bonds within our clients’ portfolios.
Global stock markets finished the quarter on a strong note to take gains for the year-to-date to over 9%
Source: Bloomberg
The value of investments and the income from them can go down as well as up and you could get back less than you invested. Past performance is not a reliable indicator of future performance.
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