The summer months in the northern hemisphere often reflect a general state of torpor, with no clear direction as investors take a well-earned holiday. This appeared to be the case in the US, which eked out minor gains mainly on the back of tech stocks. Hence the Nasdaq was up 0.92% in June, adding to its nearly 9% return for the year. The broader S&P500 managed to rise 0.48% for the month, leading to a 1.67% gain in 2018.
May was another frustrating month for the JSE All Share Index, with a variety of factors providing headwinds for local stocks, which were down 3.6%. Bonds also fell 2%. After providing a glimmer of hope in the first quarter, GDP figures for the second quarter were shocking. Business confidence also took a dip and it became apparent that the glow of “Ramaphoria” was quickly subsiding as investors took stock of a decidedly flat business environment. Adding to the woes was a sharp increase in fuel prices which further damaged prospects for an upturn in consumer spending.
In April markets appeared to shrug off rising global geopolitical tensions, with US markets in particular ending the month on a positive note. This is not to say the month was not volatile, marked by jitters in the bond markets and pressures on the oil price, but investors seemed to be prepared to take on more risk. This had a positive knock-on effect on emerging markets such as South Africa.