August 2024 | Global stocks fell sharply at the start of the week, with Japan’s benchmark Topix index on Aug. 5 suffering its biggest one-day drop in more than three decades. European shares and U.S. stock futures also declined. Meanwhile Emerging Markets stock indices, mostly in Asia (Taiwan and South Korea), fell into the red and currencies that had benefited from high carry trades funded by the yen, such as those in Latin America, lost ground.
01 | Global stocks suffered big losses, with Japan’s Topix index racking up its largest one-day drop in more than three decades. European and US stocks also fell, while bond yields reversed the rise seen earlier this year.
02 | July labor market data point to a slowdown in the US economy. Combined with a more benign inflation picture in a restrictive rate environment, central banks will likely need to cut faster than they envisaged.
03 | A spike in volatility may warrant reducing risk exposure as a precaution, but the moves could create opportunities in developed markets, especially in equities. Government bonds appear less attractive after recent moves, while the outlook for corporate bonds is mixed, with investment grade credit preferred to the high-yield segment.
Unless otherwise stated, all information contained in this document is from Amundi Asset Management as of August 5, 2024. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the authors and not necessarily Amundi Asset Management and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product or service. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not indicative of future results. Amundi US is the US business of Amundi Asset Management.
