Economics & Strategy
Global Equity Markets Mixed
—Sean Darby, Global Head of Equity Strategy
Equities had a very mixed quarter. Three weeks before the June Federal Reserve meeting, investors withdrew approximately US$17.5 billion from global equities. U.S. equities reached new highs but gave back their gains over June as the market began to reconsider the duration of the Fed’s quantitative easing (QE) program. Economic data was mixed, although the labor market continued to show improvement.
The froth in emerging markets quickly evaporated as worries over the tapering of QE caused ongoing liquidation of LatAm and Asian equities. Interest rate hikes in Brazil and Indonesia shook sentiment while political uncertainty in Turkey caused a broad-based sell-off in developing markets.
The recent rally in Japanese equities ran out of steam as the yen reversed direction and worries over volatility in the Japanese government bond market caused investors to take profits. Although economic data continues to be weak, European equities were less affected by events in emerging markets or Japan. No news in Europe was taken as good news by the equity market.