Key Highlights for July 2024
- Global equities advanced in July, with performance characterized by a rotation away from large-cap growth stocks in favor of small caps and value.
- The rotation was largely triggered by improved prospects for central bank rate cuts, which contributed to gains for bond markets as yields declined. The Federal Reserve is now expected to begin cutting rates in September, while the Bank of Canada and Bank of England cut rates.
- Emerging markets lagged developed peers, due largely to the subpar performance in tech-heavy Asia. Chinese stocks were buffeted by weak economic data and a lack of meaningful new stimulus measures following the highly anticipated Third Plenum.
- The shifting rates outlook led to US dollar depreciation. In contrast, the Japanese yen surged as the Bank of Japan tightened monetary policy and government authorities intervened in foreign exchange markets.