Market Update July 2024

 By Mike Ross

Global Share Markets
In July 2024, global financial markets saw increased volatility and notable shifts across various asset classes. Global shares returned 4.4% in New Zealand dollar-unhedged terms. However, the performance was more subdued when hedged to the New Zealand dollar, with a 1.3% gain. Small company stocks outperformed with a 6.9% rise, while growth stocks fell by 1.0% as investors became more cautious about future returns from artificial intelligence investments. Despite this pullback, growth stocks have still gained 16% year-to-date. Emerging markets also posted a solid 3.6% return, though performance varied across regions.

New Zealand Share Market
The New Zealand share market rebounded strongly in July after a lackluster June, returning 5.9%, and reflecting improved sentiment and attractive valuations. While the New Zealand economy appears to be in a recession, the prospect of (further) interest rate cuts from the Reserve Bank of New Zealand (RBNZ) has provided a boost to market confidence. 

Bond Markets
July was a strong month for bond markets, which rallied on the back of expectations for interest rate cuts, both locally and abroad. NZ Bonds returned 2.3%, while global bonds returned 2.0%, and have now returned 7.8% and 5.8% respectively over the past year.