Schroders - Overview of markets in July 2014

Highlights:

– Global equities delivered negative returns in July amid heightened geopolitical tensions and speculation over when the Federal Reserve will raise interest rates. Emerging markets outperformed their developed market peers.

– In the US, the S&P 500 posted a negative return. Macroeconomic data largely confirmed the ongoing improvement in the US economy, particularly in the labour market, although this in turn raised concerns that US interest rates could rise sooner than expected.

– Eurozone equities delivered negative returns, impacted by fears over the financial health of one of Portugal’s largest banks as well as worries that the economic recovery might be slowing.

– Japan registered positive returns, outperforming other developed markets, as corporate earnings benefited from the weaker yen.

– Emerging markets posted positive returns. Emerging Asia was the strongest region, supported by an improved tone to macroeconomic data from China.