Citi Personal Wealth Management

Adjusting in July

Monthly Market Snapshot: July 2019

Highlights

Globally, stocks inched higher in July as central banks moved towards easier monetary policy. In the United States, the S&P 500 rallied an additional 1.3% during the month – bringing the gains since the start of June up to 8.3%. In Europe, equities fell by 2.4% as Boris Johnson became the Prime Minister of the United Kingdom (increasing the odds of a “no-deal” Brexit). Emerging markets underperformed.

The Federal Reserve decided to cut interest rates by 0.25% at its July 31, 2019 meeting. Chairman Powell emphasized that the cut should be viewed as a “mid-cycle adjustment” rather than the start of a full cutting cycle. Citi’s economists are looking for one additional rate cut in September. Apart from the Federal Reserve, updates on the trade front are once again likely to retake the center stage.

Citi’s Private Bank’s Global Investment Committee (GIC) maintains a slight underweight on global stocks. The GIC’s global stock allocation is 2.0% underweight, global fixed income is 1.5% overweight and cash is 0.5% overweight.