In this month’s update, we explore the strong equity performance seen in July and the risks that could challenge its momentum.
Key Points:
- Political dynamics continue to shape markets, with the US Federal Reserve becoming increasingly politicised. Meanwhile, Donald Trump unveiled his latest fiscal initiative—the One Big Beautiful Bill Act (OBBBA).
- A combination of robust monetary and fiscal support, along with easing tariff tensions, helped fuel economic growth and lift equity markets.
- Gains were largely concentrated in the US, where valuations remain elevated. This leaves markets vulnerable if the Fed is slow to adjust interest rates in response to changing conditions.
