Monthly report for July

The YTD return in P+ Balance was 4.3 percent at 31 July, representing a 1.1 percentage points increase compared to the end of June. 

The month's portfolio returns accounted for 1.4 percent for equities, 2.1 percent for special investments, 0.6 percent for credit bonds, 0.2 for real assets and -0.1 percent for bonds. 

July was overall a positive month on the financial markets with relatively small fluctuations. This was despite the fact that Donald Trump's deadline for entering into bilateral trade agreements was set to expire on 9 July, and leading up to this date there was considerable uncertainty about the US' ability to conclude trade agreements and under what terms. A handful of agreements were entered into, but maybe most importantly, Trump ended up extending the deadline until 1 August for the remaining countries which the market interpreted as a sign that more time would be allocated to entering into agreements rather than increasing tariffs without agreements. At the end of July, the US announced that trade agreements have been reached with Japan and the EU, respectively, two of the largest and most important trading partners. 

Besides the ongoing focus on the trade policy in July, the market also focused on a number of key economic indicators as well as the Q2 financial results. Most key indicators supported the positive sentiment by showing continued reasonable signs of growth in the US, while inflation did not rise as much as feared, despite early signs of the impact of higher tariffs. Corporate earnings were generally somewhat better than expected which contributed to supporting the stock markets.