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Our monthly market analysis and positioning

Market overview

For markets, the second half of 2019 has begun, much like the first half ended. Major U.S. equity indices reached new highs during the course of July. So did the leading indices in some other markets, known for having plenty of stocks offering secular earnings-growth stories. Towards the end of July, France's CAC 40 was trading at levels last seen 12 years ago, just before the onset of the global financial crisis. In local currency terms, the best-performing equity market in the year to date was Greece.

Bond markets, meanwhile, saw an ever growing number of bonds drooping ever deeper into negative yield territory. Among German sovereign bonds, even 20-year Bunds spent the month fluctuating around zero. At the end of the month, 20-year yields stood at -0.1%. This means that investors are effectively paying the German finance minister for the privilege of lending the country money for two decades, top of the erosion in purchasing power due to ongoing inflation. Meanwhile, even Greece, saw 30-year yields on its sovereign bonds fall below 3.5%. This puts yields of Eurozone's erstwhile crisis economy roughly one percent above those of 30-year U.S. Treasuries.

Read the complete article here.

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