April delivered broadly positive returns across risk assets, while fixed income markets experienced a more mixed environment as the ongoing tensions between the United States and Iran led investors to continually reassess the outlook for inflation and central bank policy. Reversing losses seen through March, equity markets benefited from resilient economic data and strong corporate earnings. Bond markets, however, exhibited a range of performance with corporate bonds delivering better returns as expectations of interest rate increases emerged.
Despite tensions between the US and Iran continuing to dominate headlines, and the Strait of Hormuz remaining severely disrupted, equity markets adopted a more positive outlook. Brent crude oil prices ended the month well above $100 per barrel, with ongoing ceasefire talks failing to result in a lasting agreement. Nevertheless, global equities delivered strong performance through the month, with continued economic resilience and positive momentum in technology-led sectors supporting renewed investor confidence rather than widespread risk aversion.
Source: Bloomberg
In the US, the S&P 500 rose approximately 8.7% in euro terms, extending the strong performance seen earlier in the year. Markets were buoyed by robust earnings reports, particularly within the technology and financial sectors, alongside continued optimism surrounding artificial intelligence and technology investment. Large-cap technology stocks again led performance, with the NASDAQ Composite rising 13.5% over the month.
Economic data in the US remained broadly positive with data suggesting the US labour market remained stable through the first quarter, although weaker household spending and geopolitical uncertainty may influence firms’ hiring intentions. That said, tax incentives have helped support consumer spending, offsetting some of the negative effects of higher fuel prices. One of the big drivers of returns has been corporate earnings with a substantial number of companies comfortably exceeding analyst expectations. Inflation data has yet to show any impact from the Middle East crisis.
European equities also posted gains, although performance was somewhat more modest increasing by roughly 5.1% in April. However, a slowdown in business activity across the region suggests that ongoing disruption in energy markets is beginning to feed through to the real economy, placing downward pressure on the region’s growth outlook. Europe’s energy reliance on the Middle East makes it more vulnerable than the oil self sufficient US economy.
The UK market lagged somewhat relative to its global peers, with the FTSE 100 returning approximately 3.1% in euro terms. The UK market’s heavier weighting towards energy, materials and defensive sectors limited participation in the global technology rally. Financials also experienced increased volatility as rising UK inflation created uncertainty around the future direction for interest rates of the Bank of England. Nevertheless, relatively attractive dividend yields and valuations continue to support investor interest.
In contrast, Asian and Emerging Market equities delivered particularly strong performance during the month. The MSCI Emerging Markets Index gained 12.7%. Both regions benefited from improving sentiment towards regional growth and renewed investor interest in global technology supply chains. Investor sentiment towards emerging markets was also supported by a softer US dollar and stabilising growth prospects in several key economies.
Overall, the global equity index rose 8.3% in April, highlighting the strength of the global relief rally.
Within bond markets, the picture was more mixed as investors reassessed the timing and scale of potential interest rate cuts from major central banks. Global bond returns were modestly positive overall, delivering a gain of roughly 0.1% with corporate bonds doing most of the “heavy lifting.”
Source: Bloomberg
Shifting expectations around monetary policy were the primary driver of volatility across government bond markets. US Treasuries declined by approximately 0.2% during the period, as stronger economic data and persistent inflation pressures pushed yields higher, suggesting rate cuts were less likely in the short-term.
Across Europe, government bonds fared slightly better, generating a modest return of around 0.3%, but risks remain due to ongoing wage pressures and persistent services inflation. In addition, inflation-linked bonds also recorded gains, reflecting continued demand for inflation protection
Overall, while fixed income returns were relatively muted compared with equities, the asset class continues to provide an important source of diversification and income. Yields remain significantly higher than those seen during the ultra-low interest rate environment of the past decade, improving the long-term outlook for bond investors. However, as uncertainty around inflation and interest rates persists, active asset allocation is becoming increasingly important to manage risk and ensure that fixed income continues to serve its role within diversified portfolios.
Looking ahead, markets will remain focused on inflation trends, central bank interest rate signals and the sustainability of corporate earnings growth. While volatility may persist as geopolitical developments lead investors to adjust expectations around interest rates, the broader economic backdrop remains relatively supportive. As always, diversification and adopting a long-term investment perspective remain central to navigating evolving market conditions.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to book a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Bernard Walsh, Head of Investments & Pensions for Fairstone Asset Management DAC trading as Fairstone & askpaul.
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 30/04/2026
Market conditions became more unsettled through March as geopolitical risks escalated, driven primarily by the intensification of the conflict involving Iran. While volatility (the extent by which markets go up and down) increased across asset classes, we have seen a range of responses from different ways of investing. Rising concerns around oil supply, particularly through the Strait of Hormuz, have prompted a reassessment of inflation risks and, by extension, interest rate expectations and growth prospects.
Oil prices rose posted one of their strongest monthly increases on record. The disruption to tanker traffic, alongside damage to regional energy infrastructure, has embedded a renewed geopolitical risk premium into oil prices. Uncertainty has been amplified by concerns around the duration of supply disruption. Even under relatively benign scenarios, it is increasingly recognised that a full return to pre‑conflict supply levels could take several years. As a result, markets have begun to focus not just on the immediate price shock, but on the longer‑term implications for inflation persistence and economic resilience.
This shift in focus has had different consequences across asset classes. Equity markets have been most sensitive to the rise in energy prices and the associated squeeze on margins and consumer spending. Bond and currency markets, by contrast, have been more directly influenced by changes in inflation expectations and short‑term interest rate pricing.
Source: Bloomberg
Global equity markets declined over the month, though performance varied meaningfully by region. In euro terms, US equities (in green) fell by 2.8%, while UK equities (in orange) declined by 6.2%. Other regions, including Europe, experienced larger drawdowns, with losses across Japan, emerging markets and Asia exceeding 11%.
The relative underperformance of Europe and parts of Asia largely reflects their greater reliance on imported oil and gas. Higher energy prices act as a drag on both household spending and corporate profitability, making these regions more vulnerable to a prolonged supply shock. By contrast, markets with greater domestic energy security, particularly the United States, have been relatively more resilient.
China has been also relatively less affected than many regional peers. While the country remains a significant importer of crude oil, it also holds substantial strategic reserves and has made rapid progress in expanding renewable energy capacity. Large‑scale investment in wind and solar generation has reduced China’s reliance on fossil fuels over time, with crude oil accounting for only around a fifth of total energy consumption in 2024. These factors have helped to limit the direct economic impact of higher oil prices relative to other energy‑importing economies.
At a sector level, we saw pronounced differences in performance. Energy stocks were clear outperformers, supported by rising commodity prices and improving earnings expectations. Utilities and Financials also held up relatively well, benefiting from more stable cash flows, and the prospect of higher interest rates.
More cyclical and growth‑sensitive sectors, including Industrials and communication services, lagged as investors weighed the potential impact of higher input costs and weaker demand. This pattern of returns is consistent with a cautious re‑pricing of risk rather than a broad withdrawal from equities.
Looking beyond the month, equity markets have remained relatively resilient year‑to‑date. Despite heightened volatility, global equities are down less than 2% since the start of the year. Corporate earnings expectations have continued to edge higher overall, as upgrades within the energy sector have offset softer trends elsewhere. Markets continue to operate on the assumption that geopolitical tensions ease later in the spring, helping to limit downside for now.
Currency movements once again played an important role in shaping investor outcomes. In line with a more risk‑averse environment, the US dollar strengthened over the month, acting as a traditional safe‑haven currency.
For euro‑based investors, this provided a partial offset to equity market weakness. Although US equities posted significant declines in local terms, the stronger dollar meant losses were less severe when translated back into euros. This highlights the ongoing diversification benefits of global portfolios, particularly during periods of market stress.
Source: Bloomberg
Bond markets also experienced some significant moves during March, as investors moved quickly to reprice inflation risks linked to higher energy prices. While major central banks broadly held policy rates steady, markets adjusted expectations for the path of future rate cuts, with near-term policy easing priced out across much of the developed world. Bond markets react negatively to expectations of rising inflation and consequent increases in interest rates.
In March, government bonds generally outperformed corporate bonds, reflecting a more cautious investor stance. US Treasuries, in particular, held up relatively well, to some extent seen as a safe haven in the midst of uncertainty. Company balance sheets remain in a reasonably healthy state but the wider “risk off” environment dragged down corporate bond prices.
Despite heightened uncertainty, for now, market behaviour remains broadly consistent with a period of adjustment rather than crisis. Different asset classes are responding to different pressures, reinforcing the importance of diversification across regions, sectors and asset classes.
Our central view remains that the global economy is sufficiently robust to absorb the current shock, albeit with increased volatility in the near term. While risks remain elevated, markets are not pricing a severe downturn. Maintaining a disciplined, long‑term approach continues to be the most appropriate response in an increasingly complex global environment.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to book a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Bernard Walsh, Head of Investments & Pensions for Fairstone Asset Management DAC trading as Fairstone & askpaul.
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 01/04/2026
Global markets delivered volatile, but ultimately positive, performance through February. The backdrop has become more unsettled heading into March. Returns were defined by pronounced regional divergence, ongoing sector rotation and a marked escalation in geopolitical risk. Equity investors were best rewarded outside the United States, while bond markets benefited from renewed safe-haven demand as uncertainty intensified.
The most significant catalyst for rising volatility has been a dramatic escalation in tensions involving Iran. Coordinated US–Israeli strikes reportedly resulted in the death of Supreme Leader Ayatollah Ali Khamenei, triggering profound political uncertainty within Iran and raising the risk of broader regional instability. The event has intensified diplomatic activity globally, with calls for restraint and a credible political transition, but also prompted threats of retaliation and heightened security concerns across the Middle East.
Source Reuters
From an economic perspective, the implications are substantial. Iran produces over 3 million barrels of oil per day – around 3% of global supply – and sits alongside the Strait of Hormuz, a critical energy chokepoint through which roughly 20% of global oil and liquefied natural gas flows each day. While the strait remains formally open, tanker traffic has been severely disrupted amid security threats and reported attacks on vessels. Even without a formal closure, this effective constraint on transit – compounded by military strikes on key energy infrastructure sites across the region – has driven a sharp spike in oil and LNG prices, embedding a renewed geopolitical risk premium into energy markets.
Higher energy prices have broader macroeconomic implications, particularly for inflation expectations and therefore for interest rates. Sustained disruption could push oil prices over $100 a barrel, potentially driving up inflation in major economies.
As the conflict in the Middle East deteriorates further, we may have forgotten about the US trade policy developments earlier in February. The US Supreme Court’s decision to strike down the Trump administration’s use of emergency powers to impose tariffs, introduced fresh ambiguity over the future direction of trade policy. While markets initially responded positively, elevated policy uncertainty remains a potential headwind for corporate investment and business confidence.
The chart below shows the improvement in most equity markets in February with US markets struggling again, particularly the tech-laden NASDAQ Index.
Source: Bloomberg
Japanese equities were standout performers (above in blue) rising 10.3%, (in euro), and the Nikkei 225 reaching a new record high. Investor confidence in Prime Minister Sanae Takaichi’s growth-oriented agenda, alongside strong demand for Japanese corporates, continued to support the rally.
Elsewhere in Asia (above in yellow), markets benefited from sustained demand for AI infrastructure suppliers and a weaker US dollar. South Korean technology firms, including Samsung and SK Hynix, attracted significant investor flows as part of the global AI supply chain theme. Emerging markets (in red) also extended their recent momentum, supported by capital inflows and continued dollar softness.
Across Europe, equities closed the month up 2.4%, benefiting from a surge in share buyback announcements, particularly across technology, financials and industrials, which provided support despite broader uncertainty around trade.
In contrast, US equities lagged. In euro terms, the S&P 500 (above in green) fell 1.5%, while the Nasdaq (in pink) declined 4.1% as investors rotated away from stocks perceived as vulnerable to AI disruption. Even large hyperscalers such as Microsoft, Alphabet and Nvidia came under pressure as markets became concerned about tech companies borrowing to fund enormous capital expenditure projects.
We have referenced rotation regularly over the last few months – it applies not just in rotation from the US but also away from the previously unstoppable tech sector toward defensive and cyclical areas. Utilities were the strongest performers, benefiting from predictable cash flows amid uncertainty. Energy gained on rising geopolitical risk, while Materials and Real Estate also advanced. Consumer Staples and Industrials outperformed on health corporate earnings.
Precious metals delivered decent returns with gold remaining above $5,000 per ounce and attracting sustained safe-haven inflows. Heightened geopolitical risk, strong retail demand and renewed Chinese buying following Lunar New Year supported the move.
Source: Bloomberg
Bond markets delivered strong returns through February as geopolitical tensions intensified and investor risk appetite moderated. In contrast to recent months, government bonds outperformed corporate bonds, benefiting from pronounced flight-to-quality flows.
UK gilts were among the strongest performers on the back of expectations that the Bank of England are more likely to cut interest rates sooner than previously anticipated. Japanese government bonds also recovered a portion of their earlier losses after the Prime Minister clarified her tax and spending proposals. German Bunds and US treasuries posted solid gains as investors sought traditional safe-haven assets amid escalating Middle East tensions.
Corporate bonds remained positive supported by still-resilient corporate fundamentals and solid balance sheets.
In currency markets, the euro gaining 1.6% against sterling and 0.2% against the US dollar, while commodity-linked currencies edged higher.
Looking ahead, the duration and scope of Middle East tensions will be critical in determining market direction. Prolonged disruption to energy flows through the Strait of Hormuz could sustain elevated oil prices and inflationary pressures, reinforcing volatility across asset classes. With geopolitical risk layered on top of ongoing structural questions around AI investment intensity and global trade policy, markets are likely to remain sensitive to further developments.
In this environment, diversification across regions, sectors and asset classes remains paramount, with balanced portfolio positioning offering important resilience as markets navigate an increasingly complex global landscape.
Source: Bloomberg
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to book a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Bernard Walsh, Head of Investments & Pensions for Fairstone Asset Management DAC trading as Fairstone & askpaul.
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 05/03/2026
Global markets began 2026 with positive returns across most major asset classes despite an ongoing backdrop of macroeconomic, political, and geopolitical uncertainty. We saw some continuation of themes that ran through 2025 – rotation across regions, styles, currencies, and asset classes and less reliance on US mega-cap technology shares for growth. Bond markets delivered positive but more modest returns. The US dollar again weakened, meaning the benefit of a positive month for the S&P 500 was pared back.
Source: Bloomberg
Global equities advanced meaningfully during the month, with the global equity index (above in grey) rising 1.7% in euro terms, supported by strong performance across Asia (shown in yellow) and emerging markets (in red). Improving economic data, low or falling interest rates and solid company earnings underpinned gains in these regions, offsetting more muted returns across parts of the developed world, particularly the United States.
Within emerging markets, equities across Latin America and Asia rallied sharply, supported by US dollar weakness and renewed investor appetite for higher growth companies. At a country level, Korea performed especially well, while Brazil also posted notable gains, benefiting from rising commodity prices and improving domestic sentiment. In China, shares in property developers jumped after reports that Beijing had effectively dismantled its long-standing “three red lines” policy, removing borrowing limits that had constrained developers and contributed to a prolonged debt crisis.
Within developed markets, performance was more mixed. In the US, January marked a continuation of the style rotation that had begun to surface at various points in 2025. Value-oriented and cyclical sectors outperformed growth, while the predominantly technology index, the Nasdaq (above in pink), edged down 0.2%. The more diversified S&P 500 (in green) posted a modest gain of 0.2%, lagging many international markets. The previous “darlings of the market” known as the “Magnificent Seven” underperformed the broader index, highlighting increasing investor sensitivity to stretched valuations, earnings quality, and increased capital spending.
This shift was reinforced by heightened earnings-related volatility within the US technology sector. A notable example was Microsoft, which recorded its largest one-day share price decline since March 2020. Despite delivering strong earnings growth, investor concerns around elevated capital expenditure and the lengthening payback period for AI-related investment weighed on sentiment.
Elsewhere, Japanese equities (blue line in the chart) delivered one of the strongest performances among developed markets, rising 5.3% in euro terms. Gains were amplified by a mid-month appreciation in the yen, providing an additional currency tailwind for euro-based investors. Equity strength was underpinned by ongoing corporate governance reforms, robust capital expenditure trends, and improving consumer sentiment. Investor confidence was further boosted by a surprise election announcement from Prime Minister Sanae Takaichi, who is seeking a strengthened mandate for her reflationary policy agenda centred on fiscal stimulus, tax reductions, and wage growth. While equity markets welcomed the growth narrative, bond markets were more cautious, reflecting concerns around increased government borrowing given Japan’s already elevated debt burden.
European and UK equities (purple and orange in the chart, respectively) posted modest but consistent gains in January. Inflation continued to ease across both regions, while economic indicators began to show early signs of stabilisation. With the European Central Bank expected to maintain policy rates at current levels in the months ahead, and supportive fiscal developments, most notably Germany’s newly implemented 2025 budget, confidence has remained firm. These conditions reinforced the positive momentum seen in European equity markets toward the end of last year, with inflation coming under control and resilient earnings helping lift indices to multi-year highs. UK equities displayed similar resilience, underpinned by moderating inflation, gradual real wage growth, and positive spillover effects from strengthening economic conditions across Europe.
Bond markets added an important additional layer to January’s market narrative. One month into the year, the longer dated government bonds underperformed across most major markets. Japanese government bonds stood out as the weakest segment, with the yield curve steepening sharply amid rising inflation expectations and concerns over debt sustainability. In contrast, European government bonds outperformed their US counterparts, benefiting from lower supply, easing inflation and expectations of lower for longer interest rates.
Source: Bloomberg
In the US, Treasury markets were more challenging. Although the Federal Reserve held interest rates steady, long-end yields rose through January, leading Treasuries to close the month down 0.2%. The Federal Open Market Committee meeting itself proved largely anticlimactic, with Chair Powell maintaining an optimistic “Goldilocks” tone on the economy, highlighting steady activity and signs of stabilisation in the labour market. Although inflation remains above target, Powell suggested much of the current overshoot is tariff-related and likely to peak in the second quarter of the year. Following the appointment of Kevin Warsh to take up the reins as the new Fed Chair, markets speculated that current interest rate policy would remain relatively unchanged.
Corporate bonds were a clear winner within fixed income, albeit with modest gains with the global corporate bond index (in orange on the chart) rising 0.3% versus 0.1% from the broad global bond index (in pink). Risk appetite remained firm, global financial conditions remained positive, and default expectations stayed contained. European corporate bonds outperformed, helped by the relative strength compared with European government bonds.
Commodities also played a meaningful role in shaping market dynamics. Energy prices surprised to the upside, with Brent crude rising by roughly 15% with geopolitical concerns a key driver. Gold and silver prices continued their stellar performance, right up to month end when we saw some sharp sell-offs in metal prices, mainly due to dollar strength following the appointment of Kevin Warsh to head up the US Federal Reserve (their central bank).
Looking ahead, we expect markets to remain focused on the trajectory of the US dollar, trade tensions and corporate earnings and to a lesser extent to geopolitical events. January’s market behaviour points toward a more multipolar investment environment in 2026, where returns are driven less by a single theme or region and more by underlying fundamentals and diversification across geographies, styles, and asset classes.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to book a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Bernard Walsh, Head of Investments & Pensions for Fairstone Asset Management DAC trading as Fairstone & askpaul.
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 04/02/2026
2025 was a year that started with some optimism tinged with fears of geopolitical tensions, particularly nervousness about the soon to be inaugurated US president. Much of what drove markets in 2024, continued into this year.
A seminal moment occurred in April when we witnessed the drama of Liberation Day. Who can forget the cardboard list of countries and tariffs. Will we ever forget the trade war against the penguin-populated Heard and MacDonald Islands? The market response was instant and panicked – equity markets sold off sharply and the dollar plummeted. As trade deals emerged and fears of trade wars eased, markets rebounded. We began to hear of the “TACO trade” – a sense that the US administration would not follow through on threats of sanctions. The S&P 500 took 89 days to recover to its record high, scoring its quickest-ever comeback into record territory following a drop of 15% or more, All told, the index was down 18.9% from its February record when it reached its closing low for the year on April 8. We did see bouts of nervousness around trade deals as the year progressed, but the overall sense was that the outcome would not be as bad as originally anticipated. Becalmed investors returned to buying on the basis that the worst was over.
Inflation finally showed signs of coming under control, allowing central bankers to reverse interest rate increases. By the summer, the ECB had delivered 8 rate cuts in a year. The US had 3 cuts of 0.25% last year. The head of their central bank Jerome (“Jay”) Powell came under huge pressure from the White House to accelerate the pace of cuts – President Trump suggesting a 1% rate rather than a 3.5% one. Powell’s tenure will come to an end in the coming months, and we will watch with interest who the president will appoint to take over in the hot seat. Japan, on the other hand, went the other direction and bookended the year with rate rises, reaching their highest level since 1995 (still only 0.75%) as signs of economic growth and inflation emerged.
At times it felt like every time a company made a reference to AI, it guaranteed a spike in its share price. While Nvidia was the darling of the market for much of the year, it did have some setbacks, such as when Deepseek announced new technology to compete on a significantly lower cost basis. You might have expected that Nvidia would repeat its stunning returns in share price again this year but it was Alphabet (Google) that topped the Mag 7 and only Tesla joined both firms to beat the S&P 500 over the year.
Investors became concerned that AI-related stocks had become “priced for perfection” and any disappointment with results or outlook resulted in sharp selloffs. Markets were also concerned with the levels of debt-funded capital expenditure on unproven technology.
The chart below shows a breakdown of performance by industry in the US in 2025. Telecoms, technology hardware and semiconductors are all closely associated with the AI boom. However, you can see that it was by no means the strongest performing theme, with defense and metals & mining leading the way.
We saw increased demand for non-US assets during the year as investors looked for better value. Very healthy returns in US stock markets were outshone by even better gains from Chinese, European, UK and Japanese shares (in local currency terms).
A weaker dollar and compelling valuations attracted more investment in Europe in particular but also to emerging markets.
The US dollar had a terrible start to 2025. Worries emerged about its global leadership as the reserve currency. Trade Wars unnerved currency markets. Furthermore, investors worried about a huge increase in US government borrowing to fund the One Big Beautiful Bill, widening trade deficits and outflows from US equities, with preference switching to EM and EU ones. The phrase “US Exceptionalism” devalued as quickly as the currency. The dollar was not helped by US president threats to fire the Chair of the Federal Reserve.
We focus on the dollar as US equities make up about 70% of World stock markets (as measured by the MSCI World Index). While EU investors saw strong stock market growth, when we translate them to euro, the weak dollar meant that those gains were muted.
Gold shone brightly in 2025, but it was not the only one – silver, platinum and copper also saw strong price appreciation but with considerable volatility. Gold benefited from central bank demand and concerns about the US debt mountain. The other metals were boosted by industrial demand and long-term underinvestment in production as well as supply disruption in key producing countries. Inevitably, a speculative element becomes part of the equation.
With geopolitical tensions in many parts of the world, you might have expected to see oil prices rise. On the contrary, supply increases from OPEC+ and peace talks ongoing in the Russia Ukraine conflict underpinned a steady slide in oil prices throughout the year.
Bonds delivered a more modest return than equities. Risk was rewarded in the corporate bond market and high yield stocks. We saw mixed performance among EU govt bonds, Spain and Italy doing well but French instability with multiple governments meant that their bonds suffered. US corporate bonds fared much better but currency weakness dampened returns.
Overall, investors who stayed the course through the turbulence around Liberation Day were very well rewarded. We did see some rotation into sectors other than just mega cap US stocks, resulting in a broader uptick than we have experienced for some time.
Global growth is likely to be slower than previous years. Trade wars and geopolitical conflicts remain. It is times like this that diversification is essential and likely to be rewarded.
This publication was prepared by Bernard Walsh, Head of Investments & Pensions for Fairstone Asset Management DAC trading as Fairstone & askpaul.
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 09/01/2026
November started badly for equity markets as volatility returned but finished just marginally down for the month. After a strong run through early autumn, investors dialled back risk appetite as questions around extended valuations – particularly in U.S. mega-cap technology stocks – began to weigh more heavily on sentiment. The softening tone did not signal a drop in performance by these companies, rather a collective pause as markets reassessed the durability of recent momentum. We saw some continued capital expenditure by tech companies but this time, funded more by debt issuance than from their cash piles. Higher risk assets like cryptocurrency had a difficult month and bonds continued their crab-like sideways shuffle towards modest gains.
Source: Bloomberg
In the United States, equities began to cool after an extended year-to-date rally dominated by the “Magnificent Seven”. Corporate fundamentals remained broadly supportive – with 81% of S&P 500 companies beating expected earnings in Q3 and positive outlook statements. Investors grew more cautious about the increasingly concentrated markets and the stretched valuations associated with technology shares.
Elsewhere in the region, the end of the government shutdown allowed economic data releases to resume. Inflation continued its downward trend – reinforcing expectations that the Federal Reserve could cut rates further before the end of 2025. Meanwhile, consumer spending indicators pointed to a gradual softening economy. Together, these dynamics encouraged a more measured approach among market participants, prompting a rotation toward defensive sectors.
European equities, by contrast, finished the month up 0.8%, proving resilient despite the broader slowdown in global market momentum. Economic activity across the region remained sluggish, most notably in Germany’s industrial sector, where output data continued to point to underlying weakness. Even so, the composition of Europe’s equity market helped cushion returns. Limited exposure to the high-valuation technology names that weighed on U.S. indices provided a relative advantage, while renewed strength across luxury goods, select industrials, and consumer-facing areas helped offset softness elsewhere. Meanwhile, stabilising energy prices offered an additional tailwind to both household budgets and corporate margins. Taken together, these factors allowed European equities to deliver a more stable performance compared with the U.S.
The UK market also delivered small gains led by resilient energy and materials stocks. Bank of England commentary suggested a growing willingness to cut boosted returns.
Emerging markets faced a more challenging backdrop in November, weighed down by the tech market weakness and doubts about the durability of the Chinese economy – including news of slowing industrial production, muted retail sales, and persistent strains in the property sector. Countries with significant exposure to the global technology cycle, notably South Korea and Taiwan, also experienced heightened volatility, as semiconductor and hardware manufacturers tracked the U.S. technology index lower.
In Japan, equities closed the month down 1.5%, after several months of strong gains. The structural tailwinds supporting the Japanese market – namely ongoing corporate governance reforms and a persistently competitive yen – remain in place. However, rising inflationary concerns and a flare up in geopolitical tensions between Japan and China, followed diplomatic friction around Japan’s position on Taiwan.
Across bond prices edged up overall to counter weaker stock market sentiment.
Source: Bloomberg
Softer inflation readings across the U.S., eurozone, and UK supported a modest rally in government bonds, with U.S. Treasuries leading the way and finishing the month up 0.5% as market expectations shifted further toward a December rate cut from the Federal Reserve. Elsewhere, returns were more subdued. Japanese government bonds were among the weakest performers, declining 1.3% as yields rose amid growing concerns over the sustainability of proposed tax packages under the new government leadership.
At a global level, corporate bonds slightly outperformed government bonds, supported by resilient balance sheets and positive company results.
In the eurozone, German Bunds lagged as higher-than-anticipated government borrowing requirements dampened sentiment. Inflation continued its downward trajectory, with core inflation easing to 2.1% in October. However, with this still marginally above the ECB’s 2% target – and services inflation accelerating to 3.4% – the central bank may face some complex decisions around interest rates as it looks toward 2026. For now, though, broader European government bond markets remain largely flat.
Overall, November represented a natural consolidation phase as markets absorbed earlier gains, reassessed valuation risks, and looked ahead to 2026 with cautious optimism.
As we move into the final weeks of the year, the key themes remain largely unchanged: the durability of the drop in inflation, the path ahead for central bank policy around interest rates, and the ability of the global economy to sustain growth amid ongoing geopolitical and trade-related uncertainties. Major global themes such as AI adoption continue to evolve and technology companies have become a critical part of the investment universe. The questions being asked are can they support high valuations and deliver the growth to support the extraordinary level of debt-funded capital expenditure.
Against this backdrop, we continue to believe that regional diversification within equity portfolios can help enhance long-term returns while reducing concentration risk – an important consideration in a market environment where volatility may persist. Likewise, high-quality bonds retain a valuable role as both a source of steady income and a stabilising force within multi-asset portfolios.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to book a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Bernard Walsh, Head of Investments & Pensions for Fairstone Asset Management DAC trading as Fairstone & askpaul.This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 05/12/2025
Investors see healthy gains:
October has long been known as a challenging month in markets, mainly because it is the month that delivered some of history’s biggest crashes:
While October’s reputation for volatility is well known, the reality is that over the past 50 years, it actually tends to be one of the better months for equity returns. If we look at the US market, the average return in October is up just less than 1% which is stronger than September (usually negative) and not far off April or November — which are often the best months. (Source: Y Charts November 2025). Some investors think of October as the inflection point in the market year – the moment when we shake off the last of the summer glow and look ahead to the “Santa Rally.”
This year we saw a continuation of the cautious optimism that had begun to build in September, as global equities advanced on the back of easing inflation pressures, interest rate cuts, and another broadly positive corporate earnings season. Investor sentiment improved, but not without restraint – persistent geopolitical tensions, political uncertainty, and ongoing trade disputes kept volatility in play and reminded markets that the path forward remains uneven.
Source: Bloomberg
In the US, equities extended their winning streak, led once again by the technology-heavy Nasdaq, which climbed 6.7% in euro terms. The “Magnificent Seven” mega-cap stocks were at the forefront, delivering robust earnings that reassured investors about the resilience of U.S. corporate profitability. The broader S&P 500 followed suit, with a strong 4.3% gain.
Asian and emerging market equities also enjoyed a strong October, extending the positive momentum seen in recent month with gains of approximately 6%, reflecting a renewed sense of optimism across developing economies. China delivered modest gains, with the real growth coming from India and broader Emerging Asia – where markets were buoyed by a weaker U.S. dollar, positive trade talks between US and China, and an uptick in investor confidence.
Japan was another bright spot, with equities rallying strongly as the Nikkei reached a new record high. The appointment of Sanae Takaichi (known as “the Iron Lady” – yes, another one!) as Japan’s first female prime minister added a sense of political renewal and fuelled hopes for government stimulus packages and continued corporate reform. Japanese exporters were boosted by a weaker yen which enhances overseas earnings when converted back into local currency.
Within continental Europe, equities posted steadier gains, with gains of 2.2% over the month. Strength in autos and luxury goods provided much of the lift, helped by signs of improving demand from China and a modest pickup in global trade momentum. Political uncertainty held back French markets with their fifth prime ministerial appointment in two years. German economic growth was also underwhelming and inflation moving upwards caused some jitters.
In the UK, equity performance was mixed, with defensive sectors and energy names doing well while the continued weakness in the UK economy and stubbornly high inflation once again hitting domestically focused businesses.
Bond markets delivered broadly positive returns through the month, benefiting from interest rate cuts. Investors worried about government shutdown in the US as well as fears that future cuts may not be imminent.
Source: Bloomberg
In Europe, the main government bond markets posted modest gains as inflation continued to moderate, and growth concerns resurfaced. Bonds favour weaker economic news as this is more likely to lead to interest cuts in the future which boosts returns. UK gilts were the standout performers rallying 2.9% – their strongest monthly gain in almost two years.
Within corporate bond markets, returns were buoyed by positive company news and continued evidence of balance sheet strength.
As we approach year-end, the familiar themes continue to shape market sentiment: inflation continues to fall, global interest rates continuing downwards slowly, and the resilience of global growth amid persistent trade and geopolitical headwinds. October once again underscored how swiftly markets respond to encouraging economic news. We also saw that bouts of volatility are inevitable. At Fairstone, we remain committed to building well-diversified portfolios across regions and asset classes, working with the global leaders in fund management and investment research to deliver the very best client outcomes.
This publication was prepared by Bernard Walsh, Head of Investments for Fairstone Asset Management DAC trading as Fairstone & askpaul.
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 10/11/2025
September delivered solid returns across global equity markets, as optimism over lower interest rates, resilient economic data, and appetites for growth again reasserted themselves.
Source: Bloomberg
At a regional level, emerging market equities (shown in orange above) led performance in September, advancing 5.8% in euro terms. Asia Pacific ex-Japan (in yellow) followed closely with a 4.4% gain. Chinese has been a strong performing market this year but Taiwan was a major contributor in September. Emerging Markets typically benefit from a softer dollar, easing trade tensions, and a continued improvement in investor sentiment.
In the U.S., markets continued to grind higher, with the large-cap S&P 500 (shown in green) rising 3.25%, though still trailing the technology-heavy Nasdaq. Optimism over interest rate cuts provided a strong tailwind for mega-cap growth stocks, as the Federal Reserve delivered its first 0.25% interest rate reduction of 2025. Expectations of further cuts provided support to equities – particularly in rate-sensitive sectors. The renewed ‘lower-for-longer’ interest rate story reignited investor confidence, driving fresh capital back into stocks.
Positive corporate earnings reports also underpinned equity market optimism, with many companies continuing to surpass forecasts. Readers may have expected trade wars and tariffs to hold back share prices. Positive company results helped reassure investors that, despite ongoing global tariff concerns, corporate performance remains resilient – easing fears that slowing economic momentum might threaten stock valuations.
Across Europe and the UK, equity markets showed resilience though gains were capped by lingering political risks and growth concerns. In continental Europe, the MSCI Europe ex UK index advanced 1.5%, buoyed by strength in technology, healthcare, and industrial sectors.
In the UK, equity markets were more subdued. The FTSE 100 showed limited upside, reflecting the headwinds from a weak domestic economy and sterling volatility. The FTSE 250, which has greater exposure to UK-centric businesses, underperformed, weighed down by lingering concerns about demand, inflation, and policy direction.
Bond returns were mixed but generally positive and heavily influenced by positioning in short or long-dated assets. Early in the month, interest rate cuts in the US and other markets boosted bond prices. As we went through September, In several regions, stronger-than-expected inflation (negative for bonds) pushed yields on shorter-dated bonds higher (reduced prices), while longer maturities fared better.
Source: Bloomberg
Credit markets (corporate bonds) fared comparatively better than sovereigns (government bonds), with investment-grade bonds (higher quality) supported by solid corporate earnings and strong balance sheets.
In the commodity space, gold continues to shine (excuse the pun), up another 9% in September driven by continuing concerns about government debt and trade disputes. Oil, on the other hand, was down 6.6% for the month as producers continue to expand supply.
Looking ahead, one of the biggest risks is that inflation could turn out higher than expected, which would likely push interest rate expectations back up. In September, inflation across the eurozone rose to 2.2%, from 2.0% in August, with Germany running even hotter at 2.4%. In response, the European Central Bank kept its main rate unchanged at 2.00%, acknowledging the uncertainty around tariffs and future price pressures, but repeating its commitment to bring inflation back under control over time.
At the same time, ongoing trade disputes remain a worry for businesses and investors alike. Many companies are now feeling the impact of earlier tariff measures, either absorbing higher costs themselves or passing them on to consumers. For investors, this mix of sticky inflation and trade uncertainty reinforces why central banks are cautious about cutting rates too quickly, and why markets may remain volatile in the months ahead.
Taken together, September’s economic landscape is one of mixed signals: growth is holding up better than many feared, but inflation remains stubborn and trade policy uncertainty hasn’t gone away. For markets, this has translated into a supportive environment for equities. We will watch the announcements on earnings for Q3 very carefully for insights from corporates on performance and future profitability. Market watchers will be particularly interested to see if the Magnificent Seven technology shares can continue to deliver on market expectations. Bonds will react to any signs of inflation emerging and will watch carefully for signals regarding future US interest rate cuts.
At Fairstone, we remain committed to building well-diversified portfolios across regions and asset classes, with a focus on delivering long-term growth, accepting the inevitable ups and downs on the journey to delivering positive client outcomes aligned to their attitude to risk.
This publication was prepared by Imogen Hambly CFA, Portfolio Manager for Fairstone Private Wealth Ltd (United Kingdom).Fairstone Private Wealth Ltd. is authorised and regulated by the Financial Conduct Authority (FRN: 457558)
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 03/10/2025
We saw positive movements in global financial markets through August, reflecting a degree of renewed optimism, as equities across most regions delivered gains, while bond investors found some relief with central banks signalling interest rate cuts ahead. Movements in currency markets, however, saw a strengthening of the euro versus most major currencies, reducing gains for euro investors.
Across developed markets, Japan stood out as the month’s strongest performer, with the MCI Japan index (above in blue) gaining 4.5%, in EUR terms, advancing on the back of improving economic momentum and a positive trade agreement with the United States. Domestic data news was encouraging, particularly regarding economic growth and manufacturing activity.
Elsewhere, European equities reacted well to improving business activity and posted modestly positive returns, with the MSCI Europe index (in purple) up just over 1%. Political turbulence in France, following the announcement of a vote of no confidence in the government, pulled back French markets.
In the UK, the FTSE 100 advanced 0.3% in August, supported by its global exposure, while more domestically UK shares declined, reflecting ongoing concerns about the UK’s economy. The Bank of England cut interest rates by 25 basis points in August, but the effect was offset by stronger-than-expected inflation data later in the month. While employment weakened, inflation pressures remain, suggesting that fewer interest cuts were likely over the remainder of the year.
U.S. equity returns were slightly negative, with the S&P 500 (shown in green) down 0.5% in August. While US markets benefited from strong corporate earnings and solid momentum in both manufacturing and services – a weaker U.S. dollar over the month eroded gains once translated into euros.
Across Asia and emerging markets, equities advanced, supported by the temporary extension of the U.S. – China trade truce, which offered welcome relief to regional exporters. Chinese technology stocks also benefited from Beijing’s announcement of an ambitious semiconductor strategy. However, again, euro strength offset these gains, leaving the MSCI Emerging Markets index down 1.2% and the broader Asia index lower by 1.0%.
From a style perspective, the rotation that began earlier in the summer continued into August with small-cap stocks outperformed large caps, supported by resilient economic data and growing expectations of lower U.S. interest rates in the months ahead. Global real estate equities also gained for similar reasons, with solid U.S. corporate fundamentals providing an additional boost to the asset class.
Fixed income markets delivered mixed results in August, with performance varying across segments. Global corporate bonds outperformed global government bonds, with the Bloomberg Global Aggregate Credit Index (above in orange) rising 0.5% as strong earnings boosted confidence in corporate balance sheets. U.S. Treasuries experienced a volatile month: heavy issuance of more bonds and persistent deficit concerns put pressure on prices early on. However, comments from Federal Reserve Chair Jerome Powell signalling faster rate cuts boosted bond prices, particularly long-term bonds. However, expectations of lower rates in the future lead to U.S. dollar weakness through the month, weakening returns for euro investors.
In the UK, government bond fell even though the Bank of England delivered an anticipated rate cut. Investors were concerned about inflation risks and possible measures in the upcoming Budget. Meanwhile in the euro area, political instability in France weakened their government bonds, even though economic news from the country remained positive. This fed through into weakness for other bonds on the continent. Surprisingly, Greek bonds are viewed as a safer investment in relative terms to their French equivalent. Eurozone bond prices also reacted negatively to reduced expectations of further interest rate cuts from the European Central Bank (ECB). Economic growth remained broadly positive and inflation is approaching its target level, removing an urgency around further interest rate cuts.
Looking ahead, the familiar themes continue to dominate: the pace of central banks cutting interest rates, the path of inflation, and the resilience of global growth. August showed that markets are quick to reward positive surprises in these areas, though currency fluctuations and political risks remain notable drivers of volatility. At Fairstone, we remain focused on ensuring that portfolios are diversified across geographies and asset classes, with continued emphasis on equities as the key driver of returns.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to schedule a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Imogen Hambly CFA, Portfolio Manager for Fairstone Private Wealth Ltd (United Kingdom).Fairstone Private Wealth Ltd. is authorised and regulated by the Financial Conduct Authority (FRN: 457558)
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 08/09/2025
July brought broad-based gains across global equity markets, fuelled by easing inflation pressures and resilient corporate earnings. Positive tailwinds also came from the U.S. revising its trade tariffs downwards, particularly for Japan and the European Union, providing a significant boost to investor sentiment globally. Markets interpreted these developments as signs that global trade tensions may continue to de-escalate, supporting cross-border growth prospects. Having declined for most of 2025, the US Dollar has recovered some of those losses, boosting the value of US shares held by euro-denominated funds.
Global equities extended their year-to-date performance, with the MSCI World Index gaining 4.3% in euro terms.
A standout performer was the U.S. S&P 500 Index, which rose 5.20%, buoyed by better-than-expected earnings, particularly from major technology and AI-centric firms. The rally was not just driven by a handful of mega-cap stocks; the equal-weighted S&P 500 also posted strong gains, indicating improving breadth and broader investor confidence across sectors including industrials, financials, and consumer discretionary.
Eurozone equities ended the month marginally lower, following a strong first half of the year. Investor caution also increased slightly due to the euro’s strength, which impacts the competitiveness of export-sensitive stocks. dragged down by warnings from continental technology corporations about the negative impact of US trade policy on their 2026 growth targets. Food and drinks companies also struggled, blaming increasing challenges from weak demand from China.
UK equities delivered solid returns, with the FTSE 100 Index climbing 3.5%, helped by easing inflation data and expectations of interest rate cuts. The index’s composition, with significant exposure to energy, commodities, and healthcare, was a tailwind amid a backdrop of rising oil prices and stronger-than-expected sector earnings.
In Asia, equity markets were led by China, where stocks surged on the back of improving consumer confidence, early signs of economic stabilisation, and expectations of interest rate cuts. Policymakers announced a new infrastructure spending package targeting digital networks and green energy, further lifting sentiment. The rally in China helped lift the broader emerging markets, which returned 4.7% in euro terms, as commodity exporters and Southeast Asian manufacturing countries also performed well.
Japanese equities posted more modest gains in euro terms during the month, remaining near multi-decade highs. However, mid-month announcements indicating progress in U.S.-Japan trade discussions provided a temporary lift to sentiment. Investors were encouraged by strong corporate earnings momentum – especially in the auto, machinery, and financial sectors – combined with the Bank of falling interest rates.
Bond markets were mixed. A rally in early July, driven by disinflation data, reversed later in the month as global growth suggested interest cuts were less likely and governments fuelled spending by issuing more debt. Overall, global bond returns finished July flat to slightly negative in euro terms.
In the U.S., June inflation data showing further progress However, bonds struggled driven by expectations for continued tax cuts and widening government deficits.
In the eurozone, government bond yields also moved higher, and prices fell. Corporate purchasing data suggested expansion across both manufacturing and services. Inflation remained stable at 2.0% y/y, in line with the European Central Bank’s (ECB) target. The ECB opted to hold rates steady, citing caution amid global trade uncertainty.
Once again, corporate bonds outperformed government debt, with credit spreads narrowing slightly amid continued strong earnings, low default activity, and stable fundamentals. Investors continued to have appetite for quality bonds in investment-grade and high-yield markets.
Elsewhere, listed real assets – particularly infrastructure and property equities – rebounded after a mixed performance earlier this year. Demand for income-producing assets increased as lower interest rate expectations emerged and investor interest returned to real estate investment trusts (REITs), with the asset class delivering positive returns.
Gold prices remained broadly stable, consolidating gains from earlier in the year and continuing to attract demand as a hedge against geopolitical and fiscal uncertainty.
Looking forward, markets remain focused on corporate earnings, the ever-evolving trade conflicts and the resilience across major developed markets. With some uncertainty remaining, it is inevitable that we will see ongoing volatility in equities, as well as in currency and bond markets. Markets do seem to be looking beyond the immediate concerns. Across Fairstone, we adopt a long-term approach to investing, with less focus on short-term noise. We suggest that our client portfolios remain well-diversified across geographies and asset classes, to provide growth ahead of bank interest rates and inflation over the recommended time horizons.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to schedule a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Imogen Hambly CFA, Portfolio Manager for Fairstone Private Wealth Ltd (United Kingdom).Fairstone Private Wealth Ltd. is authorised and regulated by the Financial Conduct Authority (FRN: 457558)
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 08/08/2025
