The US stock market rebounded in June, so the Saltydog analyst picked this top fund to play the theme.
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This year the S&P had its worst May in seven years and second worst since the 1960's; it lost 6.6%. The Dow Jones was down 6.7% and the more tech focused NASDAQ was hit hardest, dropping by 7.9%.
In contrast, we've just seen a great June. The S&P 500 reached an all-time high after the best June for decades, up 6.9%, and the best first half of the year since 1997. The Dow Jones and NASDAQ have also rebounded.
The table below shows how other markets around the world have followed suit:
The escalation in the trade war between America and China weighed heavily on the markets in May. At one point it looked as though Mexico would also get roped in, with tariffs starting at 5% in June and then being ramped up by 5% a month until they hit 25% in July – hardly ideal for global trade.
In the end, Donald Trump suspended the Mexico tariffs 'indefinitely' after it agreed to put in place measures to stop the inflow of migrants into the US.
Jerome Powell, Chair of the Federal Reserve, gave the markets a further boost saying that "as always, we will act as appropriate to sustain the expansion". This was taken as a sign that interest rate cuts would soon be on their way.
The icing on the cake came at the G20 meeting which recently took place at the Osaka International Exhibition Centre in Japan. On Saturday, President Trump had a meeting with China's president Xi Jinping and they have agreed to resume trade talks. He also said the US would not be adding tariffs on $300 billion worth of Chinese imports. Most of the Asian markets responded well overnight, and the European markets are up in response.
In last week's Saltydog analysis, the North America and North American Smaller Companies sector featured at the top of our 'Full Steam Ahead Developed Markets' group. The leading fund in both our four-week and 26-week tables for this sector was the Baillie Gifford American fund.
It was showing a gain of 10% in four weeks and over 30% in 26 weeks. We have added this fund to our portfolios.
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