July 2024 Market Update

Overview

July was a turbulent month as global markets responded to several significant economic and political events. While falling inflation and the prospect of approaching interest rate cuts buoyed sentiment at times, weaker unemployment data shortly after month-end caused concerns about the strength of the US economy.

While major technology stocks struggled amid concerns that the AI boom was peaking, UK stocks emerged as the month’s top performers, rising 2.9%. This was driven by strong economic data and a post-election bounce, fuelled by hopes that the Labour government will offer a more stable political environment compared to recent years.

Japanese stocks struggled - falling 0.5% after a strong run - as the Bank of Japan began tightening its ultra-easy monetary policy.

Interest rates dropped over the month as central bank meetings approached in the UK and US, with the UK 10y declining 0.24% while the US 10y dropped 0.33%. This allowed rate-sensitive names to rally, with REITs having a strong month (+6.3%) and small cap stocks performing well.

Full update below…