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Article | 24 July 2019 | Investments
We had a very strong equity market with the US market experiencing its best June since 1955. The source behind the lift to markets in general was the US Federal Reserve (Fed) indicating that it could cut interest rates soon, potentially reversing a number of the four rate rises of last year. As a result many markets acted as if the Fed has already made the cuts.
Bond markets also did quite well which is quite telling. This signals that bond markets are less enthusiastic about economic growth than equity markets.
It seems as if the equity market is glossing over the worries over the economy and focussing on the stimulus that has been pledged by central banks without asking why we need the stimulus.
And while investors were also hoping for trade easing between the US and China the lack of action did not put off markets. There are a lot of unknowns at the moment and we think investors are being complacent. As a result, we are maintaining a cautious stance.
Read more about how Sheldon MacDonald, Deputy Chief Investment Officer, positioned the Architas Multi-Asset Blended Fund range and Architas Multi-Asset Passive Fund range last month in handy two-page PDFs.