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In June, the markets remained buoyed by a few key themes – earnings resilience and AI-driven momentum – but mixed signals became more pronounced, particularly regarding interest rates and inflation.
Monthly performance was therefore mixed, with marked divergence across regions and sectors. Swiss, European and Japanese equities rose, whilst US and global markets corrected. Since the start of the year, Japan and emerging markets have stood out. Over the month, and at sector level, financials and healthcare held up better, whilst consumer discretionary and technology lagged behind. Growth stocks have suffered more than value stocks, reflecting their greater sensitivity to interest rates.
US bond yields have risen sharply since January, with the 2-year yield at 4.2% and the 10-year yield at 4.4%, weighing on assets with longer durations. In Switzerland, the flattening of the yield curve supported the performance of CHF-denominated bonds, but not that of listed property, which fell by 0.8% in June, pushing its year-to-date performance into negative territory.
Commodities saw a sharp correction in June – oil down 18.6 per cent, gold down 11.9 per cent – as geopolitical fears eased. Cryptocurrencies continued their correction.
