Seeing the light

By Greg Smith, Head of Retail at Devon Funds

June was a busy month again for markets. Another ‘crisis’ was averted, with the US debt ceiling raised after weeks of negotiations. The notion that the end of a sustained period of interest rate tightening was coming to an end was reinforced by the US Federal Reserve which paused interest rates, ending a string of 10 consecutive increases over the previous 18 months, Other central banks were beating a slightly different drum, but officials in New Zealand and Australia also suggested that the end of the interest rate hiking period was in sight.

Many economies were resilient, with New Zealand a clear exception as we entered a technical recession in the first quarter. Corporate announcements domestically were fairly thin on the ground locally, although several of those that were forthcoming did see a significant investor reaction as a result.

Market wise, large global markets were out in front. Investor hype around AI helped to propel those markets with strong technology weighting higher. The Nasdaq soared over 6.5% during June, and the 32% gain during the first six months of the year marked the best half since 1983. The broader S&P500 also gained 6.5% during June and is up 16% in the first six months of the year.