Market Insights
Market Insights - July '22
Anupam Kumar
The economic data provided for the month of July is again an indication of a slowing global economy. Inflation continued to soar to new highs, growth data disappointed and PMI surveys showed activities losing momentum.
The US Fed increased interest rates by 75 basis points for the 2nd consecutive meeting after headline inflation in July printed at 9.1% YoY, more than expected.
On the other hand, high inflation pushed the ECB to announce its first interest rate hike in more than a decade, taking the eurozone out of negative rates.
European recessionary risk was most apparent in currency markets where the euro briefly slipped below parity with the dollar before rallying slightly in response to the European Central Bank’s (ECB) move.
Global growth stocks benefited most, delivering 11.5% total return in July, recouping some of their heavy year-to-date losses.
Information technology and consumer stocks rose more than 10%. While every sector finished in positive numbers, defense, communication services, staples, and health care sectors were closed in red.
It was observed that in developed markets higher beta and volatile stocks outperformed. However, in emerging markets lower volatility stocks remained the favorites among investors.
In the month of August, US Government is expected to release series of economic reports and data which will be useful for the fed meeting scheduled in late Sep’22. Historically, August has been green for the Equity market and across the globe, markets are waiting for some positive news and favorable data for a positive and bullish trend in the remaining month of this tough year, 2022!
Anupam Kumar
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