Market Index Returns July 2019

In the month of July global equities rallied modestly with the MSCI All Country World Index gaining +0.29% as the Federal Reserve cut interest rates for the first time in almost a decade and the European Central Bank strongly hinted that another round of policy easing is on its way.

In U.S., the S&P 500 Index gained +1.44% and is up +20.24% on the year to date. Technology stocks continued to rally with gains of +3.50% on the month and +31.20% on the year. Corporate earnings as reported for the second quarter continue to grow albeit at low single digit levels – mostly from share buybacks. The profit outlook for 2020 may be too aggressive with analysts expecting 11% earnings growth. Additionally, manufacturing has weakened to the point it is only slightly above contraction and may start to decline shortly. At the end of the month, investors were somewhat disappointed that the Fed reduced interest rates by only 0.25% as opposed to a more aggressive 0.50%.


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