July 2019

Dovish Central Banks Supporting Markets

• Global equities gained in June due to a synchronized dovish stance from major central banks; a weaker U.S. dollar; and a temporary trade truce between the U.S. and China.
• The S&P 500 had its best first half performance in 22 years.
• The 10-year Treasury has declined YTD and, in June, reached its lowest level since November 2016.
• Trade uncertainty, tariffs, and lower domestic demand are contributing to the weakening economic backdrop.
• Going forward, the size and effectiveness of China's next round of stimulus and the continued strength of the U.S. consumer will be key to stabilizing growth.
• Markets are increasingly dependent on an expectation of global dovish central bank policy to provide the next leg upward.