For those wondering which assets performed best, and worst, in July which proved to be a bumper month for the S&P when it rose by a whopping 5.1% as it is completely disconnected from fundamental reality and purely connected to central bank balance sheets, here is the full breakdown.
Oops corn:
DB's comments:
The same as above on a YTD basis in local currency...MOREJuly proved to be a positive month for most assets with Corn being the standout exception. Indeed Corn prices fell sharply by nearly 27% as the favourable weather during development season raised market expectations around crop yield/supply. Elsewhere, equity markets actually enjoyed a pretty decent month with major European and US indices all in finishing in positive territory. Gains were led by the major bourses in Spain (+10.2%), Italy (+8.2%), UK (+6.6%) and the Stoxx600 (+5.2%) while the S&P 500 was also not too far behind with a solid +5.1% gain. Interestingly Gold (+7.3%) trimmed some of its YTD losses to post its first monthly gain since March. This was partly helped by a weaker US Dollar, which fell -2.0% on the month against a basket of major foreign currencies as tapering expectations were themselves tapered down following Bernanke's semi-annual testimony. The idea that QE tapering was not a done deal clearly gave rates markets a boost as bearish views on bonds were pared. Whilst Treasury yields closed off the 2013-highs in July, yields are still net higher on the month which translated into a modest negative total return performance of -0.2% for the asset class. This certainly pales in comparison with the -1.4% in June and -1.9% in May but the dampening effect on US rates volatility also gave EM and DM credit assets a needed respite following the sharp sell-off in June. Indeed in the DM space, credit excess returns were positive for US IG and HY bonds which resulted in a total return performance of +0.9% and +1.7%, respectively. European corporate bonds were also positive across the board but the major outperformance in July (as well as YTD) came from Sterling credit with GBP IG and Fin Subs up +2.4% and +3.4%, respectively. On a year-to-date basis, the Nikkei (+33%) and the S&P 500 (+20%) are leading the pack, although on a USD-basis the S&P 500 is edging out slightly given the YTD decline in the Yen. Our usual performance charts and tables included over the pages.
