Bulls versus Bears: Equity Journal Q2 2018 | KPMG | UK
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Bulls versus Bears: Equity Journal Q2 2018

Bulls versus Bears: Equity Journal Q2 2018

Is it a bear market or a bull market? Our Equity Journal provides a snappy summary of the current market environment, the drivers behind movements and outlines the issues we believe investors should be mindful of.

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The second quarter of 2018 was positive for broad equity markets despite the presence of geopolitical concerns. The following key developments occurred over April, May and June. 

  • A reduction in trade policy concerns and continued improvement in US economic fundamentals boosted investor sentiment over April.
  • The US Federal Reserve (‘the Fed’) chose to keep interest rates unchanged at the start of May, but strengthened expectations of a rate hike in June. This contrasted with the UK, where expectations of monetary tightening fell after the release of sluggish economic data, which weakened sterling further.
  • Equity performance across regions was mixed, as fears around a global trade war reignited, the dollar continued to strengthen and political turmoil within Europe influenced trading patterns.
  • Equity returns were muted over June, as trade concerns and other macro issues such as Brexit weighed in on investor sentiment.
  • Overall, global equity markets largely shrugged off political concerns over Q2, delivering 7% in GBP terms (3% in hedged terms), driven by the performance of the US and UK.

Download our PDF for a full review of the key developments, or contact Farrakh Ashraf for further information. 

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