Signia Invest Insights | August 2024
Market Review and Outlook
Welcome to September. Although given the track record of recent years September tends to be the month that investors wish to avoid, as global equities have lost ground in each of the last four Septembers whilst global bonds are down in each of the last seven Septembers. So if we do manage to get some positivity this month, that would gladly fly in the face of recent history!
August was an incredibly tumultuous month in financial markets with three violent and important re-pricings at the start of the month in the USD/JPY exchange rate, Trump election odds, and Fed policy expectations, causing large intra-month drawdowns in global equity markets and subsequent spike in the VIX index of equity volatility to levels not seen since the March 2020 Covid-19 market turmoil. Despite this, a sense of calm has since returned to markets and a buy-the-dips mentality has ensued, leaving August overall as a positive month in performance terms for most markets and sectors. For instance, both the S&P 500 and global aggregate bond indices advanced for a fourth consecutive month, rallying 2.3% and 1.1% in September, respectively. That said, there were points of weakness, namely in China A-shares, the oil markets, and the US Dollar index, with the latter having its worst month since last November as investors priced in even more rate cuts and an aggressive easing cycle from the Fed following a weak US jobs report in July.
Other notable highlights during the month was the S&P 500 equally weighted index hitting an all-time high, and Berkshire Hathaway stock becoming the first US company that’s not in the tech sector to achieve a $1 trillion market capitalisation, further evidencing a broadening out of this equity bull market.
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