Market Wrap July 2024

July: Start of the new FY

• Major asset classes all delivered gains for the month of July, led by Global small companies and Listed Infrastructure.
• Global Shares on an unhedged basis gained 1.2%. Global shares on a hedged basis gained 4.1%. Value was the best performing investment style for the month, returning ~5.0%, its best relative performance since April 2022. Momentum as an investment style recorded the weakest return 1.1% over the month.
• Australian shares also performed well, relative to other asset classes. The S&P/ASX 200 Accumulation Index performed strongly, up 4.2% over the month. This was driven by strong growth from the banks, rising 7.1% after strong returns the previous month.
• Global small caps rebounded, returning a stellar 9.3% for the month. Investors shifted away from many of the mega-cap technology stocks that had led the market over the previous 18 months and rotated into small caps.
• Fixed income had another strong month with Australian Fixed Interest returning +1.5% and International Fixed Interest returning +1.9% for the month.
• The Australian dollar AUD was down against all currencies over the month with the AUD down 1.9% against the greenback. Over the previous 12 months the AUD remains behind the USD and Euro by -2.6% and -1.1% respectively, however is up 2.7% against the Yen.

Job Market Mixed

US

• The U.S. Job market is cooling. The unemployment rate  in the United States rose for the fourth month in succession to 4.3% in July, up 0.2% from June. 
• Nonfarm payroll employment increased by 114,000 in July  while the total number of unemployed people increasing by 352,000 to 7.2 million.
• In the U.S., the number of job openings changed little  at 8.2 million on the last business day of June. Labor force participation has ticked up slightly at 62.7% in July,  up from 62.6% in June.   

Locally

• The Consumer Price Index (CPI) indicator in Australia rose to 3.8% in the year to June 2024, slightly down from a 4.0% rise in the 12 months to May. The most significant increases coming from Alcohol and tobacco (+6.9%), Housing (+5.5%), Transport (+4.2%) and Food and non-alcoholic beverages (+3.3%).
• The Australian Job market remains tight. Australia's seasonally adjusted unemployment rate rose to 4.1% in June 2024, an increase of 0.5% from 12 months ago and a slight increase of 0.1% from May 2024 figure.