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Global investment markets continued their upward trajectory in July, with equities experiencing many new highs along the way as they followed the path of least resistance as trade tensions continued to ease.
Australian Equities
The ASX 200 extended its gains in July, building on the all-time high it set in June. This move came despite the RBA holding rates steady and some rotation out of financial stocks. The index went on to set a new record high ahead of the August earnings season.
Australian equities rose +2.36%, with ten of the eleven sectors finishing in positive territory. Healthcare was the best performing sector +9.05%, followed by Energy +5.71% and Utilities +5.11%. Meanwhile, Financials were the worst performer down -1.02% while Consumer staples (+0.59%) and Industrials (+2.03%) also underperformed.
The best-performing company for the month was Clarity Pharmaceuticals (CU6), rising 74.8% as it announced that its Phase 2 Prostate Cancer Imaging trial completed enrolment. The worst-performing stock in July was Boss Energy (BOE), down 62.74% after announcing a profit warning amid growing cost concerns.
International Equities
The MSCI World ex-Australia Total Return Index (AUD) gained 3.12% during July, as easing trade tensions helped lift equities with some key trade deals being made during the month.
The best performing sectors included Tech +4.05%, Energy +2.30% and Utilities +2.17%. The worst performers included Health Care -3.25%, Consumer Staples -2.75%, and Materials -1.46%.
In AUD terms the S&P 500 rose +4.41%, the Nasdaq outperformed in the US rising +5.97%, while the Russell 2000 was also positive but the laggard, rising +3.91%. European equities were both positive but had mixed results. The FTSE rose strongly +4.24% which the Euro Stoxx just finished in the green +0.09%.
Real Assets
Infrastructure continued its positive year meaning July was also strong +1.55%, although property continued its underperformance relative to other growth assets falling -0.22%.
Fixed Income
Fixed Income also saw slightly negative returns over the month as yields rose during July. International Fixed Income fell -0.15%, while Australian Fixed Income had a similar performance, falling -0.04%.
Currency Markets
The US dollar index (DXY) had its first positive month for the year as the US stuck trade deals with key partners, but still saw it settle below the 100 mark. The rise for the DXY was, +3.19% for the month. The AUD had the inverse move despite the RBA rate holding during July, finishing -2.37%, at 64.25c, down from 65.81c.
Commodities
Commodity were mixed over the month with oil prices rallying strongly +7.28% to back above $70 at $72.53/bbl. Gold was slightly weaker -0.40% to $3,289.83 while silver rose +1.67%. Iron ore had a very strong month as stimulus from China drove price action leading iron ore to rise +10.62% to $98.02/t.
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