Market overview

A trade ceasefire between the United States and China towards the end of June prompted hope that the trade war would not escalate further (for now).
While the trade war impact on the United States economy is yet to fully play out, there is an expectation that the US Federal Reserve will cut rates earlier rather than later. The Reserve Bank of Australia cut their cash rate by 0.25% in early June (and again by the same amount thus far in July). This leaves their cash rate at a record low of 1%. The Reserve Bank of New Zealand held rates at their latest review (at 1.5%), but made it clear that a lower rate may be needed. In summary –interest rates are lower for longer, reigniting the global demand for higher yielding assets.

The NZ listed property sector had another very strong month with a return of 6.0%
(+12% for the quarter, and +22% for the year to date). Top performers for the
month were Augusta and Precinct. The NZ share market too was strong (+3.8%, +7% for the quarter, +19% ytd), with June’stop performers being Mercury Energy, Gentrack, and Auckland Airport. In Australia, Gold was the best performing sector, and bond proxies like REITs and infrastructure were also strong. Global equities were very strong, led by the USA, France and Germany – regaining their losses from May.