Market Update: Equity, Bonds and Property

Developed markets have underperformed emerging markets this year - with the exception of Russia which has been negatively affected by the sanctions

Threadneedle Investments 21 August, 2014 | 11:10AM
Facebook Twitter LinkedIn

Global geopolitical concerns weighed on sentiment in equity markets in July, reflecting the ongoing crises in Ukraine and Gaza. In addition, US Q2 GDP print was well ahead of expectations at 4% annualised, raising fears that the US Federal Reserve could be forced to raise US interest rates sooner than markets currently anticipate. Risk assets struggled as a result, with the MSCI World index producing a return of -1.6%.

In contrast, with the exception of Russia emerging market equities generally had a positive month, the MSCI Emerging Markets index gained 2%, as signs of economic growth stabilisation in China surfaced. While emerging market debt was resilient, Russian debt performed very poorly as EU ambassadors approved upgraded sanctions following the Malaysia Airlines tragedy in Ukraine.

On the other side of the world, 10-year US Treasury yields moved higher in July, ending the month at 2.56%, up from 2.53% in June. However, 10-year bund yields fell as some weaker-than-expected sentiment surveys and a below-consensus reading for the harmonised index of European consumer prices for July stoked deflation concerns.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Threadneedle Investments  actively manages £84.0 billion of assets (at 31 March 2013), investing on behalf of individuals, pension funds and corporations.

Audience Confirmation


By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies       Modern Slavery Statement