Buying the soft-landing scenario

By Greg Smith, Head of Retail at Devon Funds

The Dow notched up a sequence of 13 consecutive daily gains during the month, which was the longest winning streak since 1987. In New Zealand and Australia, the indices firmed as well, with sentiment helped by both the RBNZ and RBA leaving interest rate settings alone at their respective meetings.

The NZX50 added 1.2% while the ASX200 was not far behind the S&P500, rising 2.9% during the month.

Market momentum globally was fuelled by a robust results season in the Northern Hemisphere and retreating levels of inflation, as well as acknowledgement of the latter by many central banks looking to wrap up rate tightening programs. Other economic data has also been supportive of the narrative that a soft economic landing can be achieved in the US, the world’s largest economy (and elsewhere too). Prices for oil (consumption of which is correlated with global growth) were also sending a signal during the month – rising 15% for the best July in nearly two decades.