Data source: Bloomberg

Global shares gained in the quarter with the advance led by developed markets, notably the US, while emerging market stocks lagged behind. Enthusiasm over AI (Artificial Intelligence) boosted technology stocks.

 Sources: JP Morgan, Schröder, Bloomberg

In the US

• US equities ended the quarter higher, with the majority of the gains made in June.
• The IT sector led the stock market. Fervor around AI and the potential for a boom in related technology drove chipmakers, in particular, higher. The consumer discretionary and communication services sectors also performed strongly.
• Underperforming sectors included energy and utilities.

In the Rest of the World

• In June, Japanese shares continued to gain momentum, reaching a 33-year high due to expectations of corporate governance reforms and macroeconomic shifts. Yen weakness and strength in the US market further supported the positive sentiment.
• Chinese equities saw a decline in Q2 as the economic rebound slowed down, impacting factory output and export demand.
• Hungary, Poland, and Greece performed well despite recessionary fears in Europe, with Greece’s ruling party winning a second term, bringing with it market-friendly policies.
• Brazil also performed strongly due to eased fiscal concerns, optimism about potential rate cuts, and better-than-expected Q1 GDP.

In the US

• The Fed raised interest rates by 25bps in May but took an “hawkish pause” in June. The fed funds rate is currently 5% to 5.25% being at the highest level in 16 years.
• US inflation declined in May, with the annual rate to 4.0% below expectations (4.1%).
• The unemployment rate increased, but the labor market remained strong.
• There was some investor nervousness around US debt ceiling concerns at the beginning of Q2. However, Congress finally agreed to suspend the debt ceiling in a deal that included concessions on spending expected to have little effect on economic growth.

In the Rest of the World

• The Bank of Japan (BoJ) held the first policy meeting under new governor Kazuo Ueda in April and the second in June. There was no change to policy (rate remaining at -0.10%), which suggested their dovish stance continues.
• Brazil chose to ease its fiscal policy, with potentially imminent rate cuts as Q1 GDP was better-than-expected.
• Improved macroeconomic data and signs that accommodative monetary policy will be ongoing were also supportive in India, which gained strongly in the quarter.

• The  GBP is still strengthening against USD.
• The JPY weakness continued and it hit the levels of 188 yen and 144 yen against sterling and the US dollar respectively in June. 
• The BTC and the CMC Crypto 200 Index finished the quarter higher. BTC experienced high volatility due to SEC regulatory concerns about Chinese Binance and US Coinbase trading platforms. Nevertheless, the spot bitcoin ETF filings by BlackRock and other financial services giants ensured bitcoin to finish Q2 in positive territory.

• The S&P GSCI Index had a negative performance in the second quarter.
• Industrial metals and energy sectors performed poorly, while livestock prices saw an increase. Among industrial metals, zinc, nickel, and aluminium prices significantly declined.
• In the energy sector, crude oil, Brent crude, heating oil, and gas oil prices all dropped, while natural gas and unleaded gasoline prices slightly rose.
• In agriculture, cocoa and soybean prices surged, but this increase couldn’t offset the declines in coffee, sugar, and corn prices. Wheat and Kansas wheat prices ended the quarter positively.
• Precious metals like gold and silver also ended the quarter with negative returns.

Robin Xing, Chief China Economist, Morgan Stanley

“ We expect growth reacceleration in the second half of this year in China after a hiccup in the second quarter, thanks to renewed stimulus and new employment in services bolstering private consumption. ”

Jim O’Donnell, CEO of Citi Global Wealth

“ We expect a “rolling recession” in the US, while other regions gradually emerge from recent shocks. Meanwhile, there is a surplus of cash sitting on the sidelines, waiting to buy the dip.”

18th July: Ukraine Grain Corridor Deal Up For Renewal

In July 2022, an agreement to open a safe maritime corridor in the Black Sea was concluded in order to export Ukrainian grain. It was renewed several times and is currently extended until July 18.

What we can expect: 

According to the medias, there is no optimism for the extension of the deal, a position that Moscow has reiterated frequently in recent weeks. Negotiations between Russian President Vladimir Putin and Turkey’s President Tayyip Erdogan remain the only hope to extend the deal.

23rd July: Spanish General Election

Spain is getting ready for an upcoming early general election, which will involve the selection of new deputies and senators to represent the nation.

What we can expect: 

According to recent polls, People’s Party (PP), a right-wing party, is leading the election and will certainly have the most seats in the Congress of Deputies and in the Senate. Spanish Socialist Worker’s Party (PSOE), the actual majority party, is following closely behind them.

25th July & 19th September: FOMC Meetings

The FOMC (Federal Open Market Committee) is the branch of the Federal Reserve that decides on the monetary policy on the United States.

What we can expect: 

We will most probably see an interest rate hike in July.

27th July & 14th September: ECB Monetary Policy Meeting 

The Governing Council is the main decision-making body of the European Central Bank. They take decisions, adopt the guidelines, and formulate monetary policy for the euro area.

What we can expect: 

We will most probably see the three key ECG interest rates increase. The current rates are between 3.5% and 4.25%.

18-19th September: Sustainable Development Goals Summit   

The Sustainable Development Goals (SDG) Summit mission is to guide countries and organizations towards a sustainable future through a set of 17 global goals set by the United Nations in 2015.

What we can expect: 

This Summit will mark the half-way point to the deadline set for achieving the 2030 Agenda and the Sustainable Development Goals. It will provide high-level political guidance and reigniting hope for achieving the objectives set for 2030.