MARKET REPORT: July 2017

Prepared by Brandon Yee and Thomas Connelly

 

Commentary
Developed Markets Record Strong Month – In the month of July, international developed markets outperformed U.S. equities. Pacific ex Japan and Europe ex UK recorded gains of 4.30% and 3.14%, respectively. U.S. and Japanese equities returned approximately 2%.

 


Commentary
Emerging Markets Outperform Developed Markets in July –
Emerging markets posted a gain of 5.79% for the month. Brazil and China had the largest gains of 10.95% and 8.89%, respectively. Emerging markets have outperformed developed markets over the past year.

 


Commentary
Materials and Telecommunications Edge Higher– Materials and telecommunications posted the strongest global sector returns of 5.31% and 4.60%, respectively. Healthcare and consumer staples were flat.

 


Commentary
Momentum has Strong Month –
In July, domestic value indices underperformed their growth counterparts. Momentum recorded a strong return relative to the other styles.

 


Commentary
Growth Companies Lag in International Markets –
In the international developed markets, value indices outperformed growth indices for the month. Emerging small cap equities posted a strong return of 4.32%, but slightly underperformed their large cap counterpart.

 


Commentary
Money Market Yields Remain Low –
Money market funds continue to have very low yields, performing in line with the 3 month T-Bill Index. The CPI fell by 0.02%.

 


Commentary
Municipal Bonds Post Solid Returns –
The returns of deflationary hedges were mostly positive for the month. High yield bonds and long-term municipal bonds recorded the strongest returns of 1.15% and 0.97%, respectively. Long-term government bonds and Treasuries failed to keep pace, returning -0.58% and 0.17%, respectively.

 


Commentary
Natural Gas Declines Sharply –
Inflation-sensitive investment returns were mostly higher in July. WTI Crude Oil was up 8.48% while global infrastructure gained 3.33%. Natural gas and foreign inflation-indexed bonds dropped by 7.73% and 0.57%, respectively. Gold posted a gain of 2.04%.

 


Commentary
The Loonie Appreciates Versus USD
– The U.S. dollar depreciated against all major currencies over the past three months. The Canadian Dollar and Euro appreciated the most versus the U.S. dollar. The Mexican Peso gained 5.13% versus the USD over the same time period.

 

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