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Bulls versus Bears: Equity Journal Q2 2018

Bulls versus Bears: Equity Journal Q2 2018

Is it a bear market or a bull market? Our Equity Journal provides a snappy summary of the current market environment, the drivers behind movements and outlines the issues we believe investors should be mindful of.

Greg Wright


KPMG in the UK


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Illustration of bull fighting bear

The second quarter of 2018 was positive for broad equity markets despite the presence of geopolitical concerns. The following key developments occurred over April, May and June. 

  • A reduction in trade policy concerns and continued improvement in US economic fundamentals boosted investor sentiment over April.
  • The US Federal Reserve (‘the Fed’) chose to keep interest rates unchanged at the start of May, but strengthened expectations of a rate hike in June. This contrasted with the UK, where expectations of monetary tightening fell after the release of sluggish economic data, which weakened sterling further.
  • Equity performance across regions was mixed, as fears around a global trade war reignited, the dollar continued to strengthen and political turmoil within Europe influenced trading patterns.
  • Equity returns were muted over June, as trade concerns and other macro issues such as Brexit weighed in on investor sentiment.
  • Overall, global equity markets largely shrugged off political concerns over Q2, delivering 7% in GBP terms (3% in hedged terms), driven by the performance of the US and UK.

Download our PDF for a full review of the key developments, or contact Farrakh Ashraf for further information. 

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