In this August market update, Caleb Tucker, CFA®, Director of Portfolio Strategy, reviews this month’s market trends. Markets are in a much more upbeat mood than we’ve experienced most of this year. Since bottoming in June, equities have ripped higher, on the back of better than expected inflation in July and expectations about a less aggressive Federal Reserve. Some of the key points for August’s update are:
- The rate of core inflation had been steadily declining since March, but did not decline in the month of July.
- Yields have been on a steady climb all year, but shifting expectations have brought bond yields back down.
- The 10-year treasury yield reached a high of around 3.5% earlier this year, but is now well below 3%.
- Data out of China has been worsening as of late, as weakness in the real estate sector along with concerns over the impacts of their covid zero policy remain overhangs on the economy.
- Inflation continues to plague the UK and EU, but both central banks are well behind the Federal Reserve in adjusting policy to combat inflation.
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