Creation monthly commentary - July 2024

Global equities markets were broadly flat in July, but it was a month of two halves, with the first half seeing a succession of record highs. Fixed income also rallied as speculation mounted that the US Federal Reserve (the Fed) will cut interest rates in September, particularly after positive US inflation data was released. However, equities began to turn halfway through the month, and growth stocks were particularly weak, falling by 2.5%, as investors grew more sceptical about the potential for future returns from investment in artificial intelligence (AI). At the same time, investors became more optimistic about prospects for interest-rate sensitive small-cap companies.