July Chartpack
The Masterpiece Monthly
July 2025 Market Analysis & Key Insights
Navigating the Crosscurrents: July 2025 Market Outlook
The market continues its strong upward trend, but several complex factors require a cautious approach. Here are the key takeaways:
- Strong Equity Market: The clear bull market for stocks continues, making it tough for investment funds that pick stocks based on company health.
- US Market Excitement: A wave of excitement has swept over US markets, fueled by high liquidity, a business-friendly administration, and steady economic news.
- US Dollar Risk: A surprise rally in the US dollar against its recent trend could be a major risk, with significant effects on investments worldwide.
- New Shorting Opportunities: The recent market surge has created a fresh crop of potential short targets for careful investors.
- Low Volatility: Market volatility is at a yearly low, but this calm may not last as the busy fall season approaches.
Performance at a Glance: July 2025 Index Returns
In July 2025, global markets held strong despite an uncertain climate. Equities rebounded, with U.S. stocks hitting new record highs. International stocks also bounced back, led by emerging markets. In fixed income, government bond yields rose as the outlook for economic growth improved.
| Index | Asset Class | MTD | YTD |
|---|---|---|---|
| MSCI World | Equity | 1.31% | 11.06% |
| MSCI Asia Pacific | Equity | -0.53% | 12.32% |
| MSCI Europe | Equity | -1.77% | 21.92% |
| MSCI China | Equity | 4.84% | 22.29% |
| Bloomberg Barclays Global Aggregate | Fixed Income | -1.49% | 5.79% |
| Bloomberg Commodities Index | Commodities | -0.82% | 2.47% |
| HFRX Global | Hedge Fund | 0.57% | 2.96% |
Deep Dive: Market Spotlights from the Month
The big quant equity drawdown of June/July '25
Systematic long/short strategies faced a significant drawdown as market volatility hit new lows, causing quant portfolios to de-risk and amplifying price movements against consensus exposures.
Social sentiment followers, making it look so easy
The VanEck Social Sentiment ETF dramatically outperformed the S&P 500 since April, highlighting periods where retail investor flows, not fundamentals, drive sharp price movements.
H1 hedge fund flows favor macro strategies & big funds
The first half of 2025 saw widespread inflows across hedge fund strategies, with Discretionary Macro being a standout. Notably, 90% of these flows went to the largest funds with over $5B in AUM.
US growth supported by government spending
A massive upswing in government spending, particularly on interest payments, is supporting US economic growth, but raises concerns about sustainability and sovereign credit.
How healthy is the US consumer?
A rapid fall in US revolving credit (e.g., credit cards) raises questions about consumer health. If the trend continues, overvalued consumer-linked stocks could be vulnerable.
Has AI taken all the jobs yet?
Projections for 2025-2030 show that the fastest-growing jobs will be driven by technology, with Big Data, FinTech, and AI/Machine Learning specialists leading the way with massive growth.
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