By Silvano Grimaldi, CEO of the independent asset management firm Grimaldi & Partners AG.
Monthly Review
International equity markets ended June 2024 with mixed performance.
Driving Factors
- Positive US economic data: Recent economic indicators showed unexpectedly strong sentiment within the US economy.
- Unexpected easing of inflation: The US inflation rate slowed more than expected in May.
- Declining bond yields: Falling bond yields provided support to equity markets.
Factors Weighing on Markets
- Slower US economic growth: The US economy lost significant momentum at the beginning of 2024, growing by 1.3%, compared with 3.4% in the fourth quarter of 2023.
- Doubts about imminent monetary-policy easing: Investors became increasingly uncertain about whether the Federal Reserve would begin easing monetary policy soon.
- Uncertainty surrounding major central banks: Investors remained concerned about the future monetary-policy direction of the world’s leading central banks.
- Persistently high interest rates: Markets continued to worry that interest rates could remain elevated for longer than previously expected.
Stock in Focus
Apple Overtakes Microsoft as the World’s Most Valuable Company
Technology group Apple reached another record high following further significant share-price gains.
The company temporarily overtook software group Microsoft to become the world’s most valuable publicly listed company.
Chip manufacturer NVIDIA remained in third place, supported by its leading position in the rapidly growing field of artificial intelligence.
Outlook – July 2024
Key Market Factors
- Positive early-July seasonality: Historically, the first 15 days of July have often been associated with rising equity prices.
- Potential recovery in technology stocks: Following profit-taking in the technology sector at the end of June, a counter-movement could begin.
- Beginning of the Q2 reporting season: The start of the corporate reporting season for the second quarter of 2024 will influence market developments during the summer weeks.
- Political uncertainty in France: The results of the early parliamentary elections held at the end of June and beginning of July could create short-term volatility in equity markets.
- Risk of a temporary market pause: Equity prices cannot continue rising indefinitely. A period of consolidation would therefore not be surprising.
Performance Expectations
For July 2024, we expect an upward trend in international equity markets.
Stock Recommendation: Apple
This publication is provided for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any financial instrument. Past performance is not indicative of future results.
