Looking back over the last quarter, global equities faced a notable downturn in August, with the US economy at the centre of investor scrutiny. Mixed economic indicators, inflationary pressures and interest rate fluctuations contributed to widespread market anxiety. Concerns about a potential US economic slowdown prompted sell-offs across various sectors as investors reassessed their positions amidst high valuations and potential corrections in stock prices.

UK equities experienced a turbulent August, initially buoyed by a Labour Party election victory that sparked optimism for economic recovery. However, this optimism was short-lived as broader economic concerns and geopolitical tensions significantly declined the FTSE 100. Despite a promising start, the UK market faced challenges due to adverse economic data and diminishing investor confidence.

The Eurozone displayed resilience in July, with gains led by the healthcare, utilities and real estate sectors. However, August shifted sentiment as global market downturns and economic apprehensions impacted the region. Political uncertainties, such as France’s inconclusive parliamentary elections, added to the Eurozone’s economic challenges and growth prospects. In the US, August’s downturn overshadowed July’s initial market gains. Despite the Federal Reserve’s potential rate cut and improved inflation data, concerns about a recession and political shifts, including President Biden’s withdrawal from the presidential race, affected market dynamics. Investors recalibrated their expectations in response to these complex economic and political factors.

Japan’s market experienced significant volatility, with the yen’s appreciation impacting exporters and equity sectors. The Bank of Japan’s rate hike supported the yen, while small-cap and value investments demonstrated resilience. Economic concerns contributed to further market fluctuations in August, highlighting the need for strategic diversification in investment portfolios.

Emerging markets showed resilience in July, benefiting from a weaker dollar and potential US rate cuts. However, challenges in China and Taiwan, along with currency depreciation in Turkey and interest rate delays in Poland, tempered gains. By August, increased volatility and geopolitical uncertainties reshaped the emerging market landscape, demanding adaptable investment strategies. Meanwhile, global bonds enjoyed a positive July, driven by dropping yields and central bank actions, though they faced renewed challenges in August due to economic concerns.