In June we saw the battle for No 10 reduced to a two-horse race between Jeremy Hunt and the bookies’ favourite, Boris Johnson. Conservative members have received their ballots, with the new leader to be announced in the week beginning 22nd July. Brexit is still the main topic of heated debate between the two potential PMs, with both declaring that they would be willing to leave the EU without a deal.
It looks like both candidates will face a tough political fight to deliver their ideal Brexit strategy in time for the 31st October – but we still can’t predict with certainty what a no-deal outcome would mean for the British economy, if in fact we leave at all.
In the US, the Federal Reserve (US central bank) decided to keep rates unchanged at 2.50%, although there was more caution than there has been previously about the lack of inflation. As a result, market forecasters are predicting we will see at least one rate cut by the end of the year.
In Europe, Germany’s ZEW Survey (a key measure of expectations for economic growth) fell to a 7-year low. German industry, including their dominant automobile sector, has been collateral damage of the US and China trade tiff. The US imposing tariffs on the Chinese economy has impacted economic growth to some extent, it has had a negative effect on consumer spending on luxury goods, including German car sales.
Markets
Summer is officially here, and financial markets provided some well needed sunshine. Most major stock markets bounced back from a poor month in May to offer strong single digit returns. The positive returns delivered were primarily expectation driven. Investors’ belief that Central Banks globally will support the economy should it weaken, which is good news for investors in shares.
The UK’s FTSE 100, representing the largest companies in the UK, delivered some positive returns, finishing the month +3.95% higher. The top ten companies pushing the FTSE 100 higher contain shares that typically pay high dividends to investors, such as GlaxoSmithKline, and shares in commodity-focused companies like Royal Dutch Shell, with both types of shares benefiting from lower interest rates.
US shares also had a better month than May recouping last month’s losses closing +7.05% higher. The shares that didn’t do so well last month were some of the leaders this month. Tech companies Apple (+13.05%), Amazon (+6.68%), Microsoft (+8.31%), and Facebook (+8.75%) led the way.
Other regions also saw positive returns, including Europe (+4.52%), Emerging Markets (+6.28%), Asia Pacific (+6.60%), and Japan (+3.41%).
In corporate news, Beyond Meat, a producer of plant-based meat substitutes (we wrote about them in our ‘Companies that do good’ blog back in March) announced its first set of results as a publicly traded company. Their results were better than expected as their shares soared in June to end the month up +54.58%. Whether people are cutting back on meat for health reasons, animal welfare or to combat climate change, these results show that our eating habits are changing.
Currency
The British Pound’s performance was far from sterling. It declined against the Euro (-1.26%) and rose only slightly against the US Dollar (+0.34%), and (+0.14%) against the Japanese Yen.
Investment type performance breakdown
Performance among the investment types in your Plan this month was positive, with shares (+4.88%), commodities (+1.33%), global property (+0.98%), and bonds (+0.89%).
Summary with Plan details
Due to the strong performance of the different investment types, our Plans also produced a positive set of results. Higher risk investments in our Adventurous and Ambitious Plans performed the best, but, our other lower risk investment styles also produced (albeit slightly lower) positive returns too.
As always, our Investment Team remain focused on keeping your Investment Plans on track and are ready to act as opportunities arise.
The figures shown are based on a medium-risk (Confident) investment Plan.
Please remember the value of your investments can go down as well as up, and you could get back less than invested. Past performance is not a reliable indicator of future returns.
