Market Trends: July Overview

Market Trends: July Overview

8/16/2023

Positive movements in the stock markets in July and their impact on your portfolios.


Throughout July, the financial markets continued to exude positive sentiments. Global stock markets, despite a slight dip early in the month, sustained an interesting growth trajectory. By month-end, they even reached their annual highs—measured, for instance, by the S&P 500 index or the MSCI World index. The broad global MSCI World index, tracking approximately 1500 of the largest international companies from the developed world, increased by nearly 18% in USD since the beginning of the year. This growth partially heals the wounds from the dismal previous year, providing a sense of relief to investors and notably enhancing the value of investment portfolios. Once again, in the context of equity investments, it reaffirms the importance of maintaining investment positions during challenging downturns, avoiding emotional responses, and refraining from selling amidst losses.

What's driving this positive trend?

One of the key factors is the decline in inflation growth. In July, the inflation rate dropped to 3% in the US and 5.3% in the EU. Finally, we've witnessed a decline in inflation in the Czech Republic, down to a single-digit figure of 9.7%.

Graph showing the growth of indexes: SP500 (blue), MSCI WORLD (red), and STOXX 600 (green)

The Impact of July on Our Portfolios Last month strongly influenced the equity portion of our portfolios. We observed growth in global (American, European) developed stock markets. The bond segment of our portfolios more or less stagnated or experienced slight losses due to a marginal increase in market interest rates. Overall, our portfolios, expressed in CZK, experienced relatively solid growth, primarily driven by the growth of stock markets across the world. The depreciation of the Czech crown against the euro also contributed positively.

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Ing. Petra Štěpánková, MBA, EFA

+420 604 218 602

petra@meliorinvest.cz

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