Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
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Chief Investment Strategist
June market performance: A summer party where (almost) everyone pitches in
Market Rewind
Søren Otto Simonsen
Senior Investment Editor
Summary: Most numbers in this monthly market performance summary came out positive. While green figures are always a good thing, they have also led to high equity valuations, especially in the US AI industry. In that regard, a positive outcome like this should probably not be viewed as a signal that everything is fine and dandy, but rather as positive momentum in the market while we await how long-term trends like inflation, central bank policies, and of course AI play out.
Global equities increased with almost six percent during June. Looking down this market overview it is evident that basically everybody brought something to the party in a market environment where it seems that hope of an easing macro environment trumped worries about the opposite.
US 6.5%
The positive performance was especially visible in the US, where the market climbed 6.5%, based mainly on continued hype around AI.
Europe 2.3%
Europe also came out of June with a positive equity performance, albeit the lowest of the regions. This was, among other things, an outcome of European defence companies continuing their high order intake.
Asia 3.1%
The Asian region ended up with a positive outcome of a little more than three percent. While the region in general performed well, Japan was the major market with the strongest performance.
Emerging Markets 3.2%
The Emerging Markets region gained 3.2%. India had a strong month, while China, Taiwan, and South Korea—the other largest constituents—had positive but more muted performances.
All sectors posted positive returns for June. Consumer discretionary took top place together with industrials and materials, which could possibly signal more optimism among consumers. Popular sectors like finance and technology also posted high performance figures.
Overall bond performance was slightly negative for June, pulled down by sovereigns. The moves were quite small, which could indicate that markets are still in doubt whether they believe rates are going up, down, or remaining flat.
Check out the rest of this month’s performance figures here:
Sources: Bloomberg and Saxo
Global equities are measured using the MSCI World Index. Equity regions are measured using the S&P 500 (US) and the MSCI indices Europe, AC Asia Pacific, and EM respectively. Equity sectors are measured using the MSCI World/Sector] indices, e.g., MSCI World/Energy. Bonds are measured using the USD hedged Bloomberg Aggregate Total Return indices for total, sovereign, and corporate respectively. Global Commodities are measured using the Bloomberg Commodity Index. Oil is measured using the next consecutive month’s WTI Crude oil futures contract (Generic 1st CL Future). Gold is measured using the gold spot dollar price per ounce. The US Dollar currency spot is measured using the Dollar Index Spot, measuring it against a weighted basket of the following currencies: EUR, JPY, GBP, CAD, SEK, and CHF. Unless otherwise specified, figures are in local currencies.
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