Investment

June General Market Comments

by Pierre Mouton

June General Market Comments

“In the Summertime” – Mungo Jerry, 1970

Yes, it’s now summertime; a season supposed to be quieter for financial markets. But history suggests that it’s not necessarily the case and that, for whatever reasons, there can be significant spikes of volatility during the summer months. In Mungo Jerry’s song, it’s all about easy and pleasant choices to be made in summertime, while, for investors, choices can be tricky, especially after the very particular first half we’ve been through and the multiple possible troublemakers ahead, like US elections and the Democrat candidate debate, French elections, continuous geopolitical tensions, Central Banks policies, the Yen’s incredible weakness (is it hiding something serious?), and, of course, demanding valuations in equity markets which are more polarized than ever, with the spectacular dominance from AI-related plays and Growth versus the rest of the market, not to mention very tight credit spreads which are at relatively dangerous levels if we look at the past occurrences when it reached these lows.

June 2024 has been kind of a redux of the last 18 months for equities: the MSCI World Growth added 4.8% while the MSCI World Value lost more than 1%, this says it all. The dynamics around AI and especially Nvidia buoyed the Nasdaq again (+6.2%), and the S&P 500 benefited as well with a +3.5% return. European markets have been weak, with the French elections possibly jeopardizing an historical centre (left or right) oriented National Assembly: the Stoxx 600 lost 1.3% and the euro fell 1.24% versus the dollar. Sovereign spreads also tended to widen on the Old Continent. The Japanese Topix added 1.3%, the MSCI Emerging Markets 3.6% and the Chinese CSI lost 3.3%. When measured into USD, many markets struggle versus the S&P 500 year to date: Europe is 11% behind, Japan 10%, China 16% and EM 8%.

Long term Government yields receded somewhat with better inflation gauges, Credit was down, and Gold stayed flat while Oil added 5.9%, outstripping the shiny stuff for the year (+13.8% versus +12.8%).

 

 

 

Past performance is not indicative of future results. The views, strategies and financial instruments described in this document may not be suitable for all investors. Opinions expressed are current opinions as of date(s) appearing in this material only. References to market or composite indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only. NS PARTNERS SA provides no warranty and makes no representation of any kind whatsoever regarding the accuracy and completeness of any data, including financial market data or other financial instruments referred to in this general comment. This document does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. Any reference in this document to specific securities and issuers are for illustrative purposes only, and should not be interpreted as recommendations to purchase or sell those securities. References in this document to investment funds that have not been registered with the FINMA cannot be distributed in or from Switzerland except to certain categories of eligible investors. Some of the entities of the NS Partners Group or its clients may hold a position in the financial instruments of any issuer discussed herein, or act as advisor to any such issuer. Additional information is available on request. © NS Partners Group

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