Published
9th September 2024
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Perspective News, The Cambridge Weekly
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The Cambridge Weekly –9th September 2024
Nervous markets ahead of second pivot
Capital markets have started September rather despondently. It feels similar to (though not nearly as bad as) the sell-off that started August, after which stock values quickly recovered. There were risks and headwinds back then, but nothing that significantly dampened the long-term outlook. This is even more true now: there are lots of uncertainties, but little that should materially concern investors. After August’s early sell-off and eerily strong recovery, we said markets should be generally positive in the months ahead – but further bouts of volatility were likely. Nothing last week has disturbed that view.
August market returns review
August was a rollercoaster ride in capital markets and, like an actual rollercoaster, it ended where it started. Capital markets were more volatile at the start of the month than they have been all year, but monthly global stock returns were virtually flat at 0.2% in sterling terms. The ride was at its most extreme in Japan (volatility over 62% annualized, for the month), but the pattern was largely the same across most major regions: a big sell-off in the first week followed by a remarkably steady and historically unusual climb back up. The swings were not fully even, though, with Japan and the US tech sector finishing down, while Europe and the UK finished up. The table below shows August’s major asset class returns in sterling terms
