July continued to be a strong month for risk assets, particularly equities, as the Morningstar Global Markets Index rose 3.2% for the month on an SGD basis. The underperformance of the USD against SGD reversed in July, as the greenback appreciated by about 2.1% against SGD. This helps the performance of USD-denominated assets when translated into SGD.
July continues to be risk on
The Magnificent 7 stocks—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla—drove performance on the back of strong earnings, with growth equity outperforming value equity. Trade resolutions between the US and Japan and between the US and the EU were reasons why markets continued to be “risk-on”. We saw signs of exuberance, however, as lower quality growth names and companies with high short interest (i.e. those that hedge funds are fundamentally short) outperformed. While uncertainties around tariffs continue, we noticed an interesting development around the earnings of US…
