MARKETS IN A NUTSHELL — FOR JULY 2025

Global markets pushed higher again in July. US equities led the gains, with the index of the five hundred most valuable companies on US bourses making a slew of record highs. Blockbuster results from Big Tech giants Alphabet (Google), Meta (Facebook) and Microsoft powered markets. Chipmaker Nvidia — soon followed by Microsoft — became the first $4 trillion company by market cap on renewed AI hype. Elsewhere, Chinese equities bounced 4.5%, while European markets ended lower. 

Beneath the surface, the US economy flashed mixed signals. Economic growth rebounded in the second quarter, but the US labour market is undeniably losing momentum. A poor July jobs report even cost the chief US labour market statistician her own job — fired by President Trump as if it were The Apprentice. The US Federal Reserve kept rates unchanged, despite Trump’s increasingly bellicose demands for Chair Jerome ‘Too Late’ Powell to ‘drop the rate’. US and global bonds ended lower.

US tariffs returned abruptly at month-end as the White House announced sweeping new duties, averaging 16% — America’s highest tariff wall since the 1930s. Harsh levies hit goods from the EU, Canada, India, South Korea and Switzerland. Trump unexpectedly reversed plans for an import tariff on raw copper ore, targeting semi-finished copper products instead. Traders dumped the red metal, sending prices down.

The flagship Foord International Fund continues to deliver inflation-beating returns this year. The fund advanced 2% in July and has delivered 19.4% for the year-to-date. The Foord Asia ex-Japan Fund gained 4.6% for the month and 20.0% for the year, as Chinese markets — where the fund is overweight the benchmark — continued to rerate off their 2024 lows.

South African assets benefited from rand weakness as well as from the global appetite for yield. SA equities rose 2.2% in rands — but a more modest 0.6% in US dollars — led by resources stocks. SA bond investors celebrated SARB’s quarter-point repo rate cut and the MPC’s announcement that it would target 3% inflation going forward, despite Treasury pushback. Longer dated bonds and listed property counters rallied most. The rand fell 3% against the US dollar as the Trump administration saddled South Africa with a hefty 30% import tariff.

The Foord SA unit trust funds safely added good absolute returns ranging from 0.7% to 2.5%, mandate dependent. These were not at the top of the relative ranking tables, given our more cautious exposure to the riskiest asset classes, including US tech stocks, volatile resources companies and long-dated bonds. The fixed income suite has a preference for the better valued inflation-linked bonds, which underperformed in the bond rally.

Markets have been buoyed by easing inflation, improving sentiment, and expectations of imminent Fed rate cuts. However, persistent risks — tariff wars, extreme US tech valuations, narrow credit spreads, and softening economic indicators — warrant investment restraint. We continue to prioritise valuation discipline, scenario-based risk management, and capital preservation as we wait for fundamentals to catch up to market optimism.