Market Update – July 2018
Global stocks charged ahead gaining 2.8% in July as all stock asset classes posted gains. U.S. large value stocks led the way with a 4.2% gain. Despite a positive month across the board, international stocks remain in the red year-to-date. Bonds were essentially flat during July, although inflation-protected bonds fell 0.5% in response to changes in inflationary pressures.
- The first estimate of second quarter real GDP growth came in at an annualized rate of 4.1%. This increase of almost 2% from first quarter’s figure marks the fastest growth rate posted since the 3rd quarter of 2014.
- Inflation, measured by the Consumer Price Index for all goods, ticked up slightly to 2.8% year-over-year. Energy prices decreased during the month but gained 12.0% over the past year.
- Unemployment remains near business cycle lows at 3.9%.
- The S&P 500 (+3.7%) generated strong gains to start the second half of the year. U.S. small cap stocks (+1.7%) also managed solid gains during July.
- International developed (+2.5%) and emerging market (+2.2%) stock asset classes reversed portions of their losses from earlier in 2018. International large value stocks (+2.9%) outdid all other developed market stocks last month.
- Reacting to an insignificant nudge upwards across the yield curve, short-term bonds (+0.1%) and intermediate-term bonds (+0.0%) were effectively flat.
- Inflation-protected bonds (-0.5%) fell slightly during July but have still generated a 1.2% gain over the last 12 months.
- International bonds (-0.1%) were also relatively flat for the month.
- Global REITs (+0.9%) and reinsurance (+0.7%) each made gains during July. However, commodities (-2.1%) and managed futures (-0.6%) each fell in part due to volatile energy markets.
Read our complete July 2018 Economic & Market Commentary for Market Returns Year-To-Date, Market Returns Longer Term Annualized, Economic Indicators, and an Appendix.
Sources: Bureau of Economic Analysis (BEA), Federal Reserve, Morningstar Direct, and Standard and Poor’s.
This is intended for informational purposes only and should not be construed as legal, investment or financial advice. Please consult your legal, investment and financial professionals regarding your specific circumstances.