The recovery of the global economy continued in July with strong GDP growth in the United States and the euro area. Higher consumption affected US GDP growth by 6.5% for the quarter, exceeding the levels of the last quarter of 2019. Similarly, GDP growth in the euro area was 2%.
However, business surveys show a decline from record levels amid the spread of COVID-19. The stock indices ended the month in positive territory, although with a slight weakening towards the end of the month. An exception to the growth in July were Chinese stocks due to the new regulations imposed on the private education and technology sectors.
A sharp yield drop of the US 10-year bond during the month erased the growth from the beginning of the year. Such a movement is usually the effect of lowered growth forecasts. In this case, against the background of record levels of the US S&P 500 index, other factors seem to be influencing. On the one hand, the proliferation of the delta variant of COVID-19 has raised concerns about growth. On the other hand, the demand for bonds was unusually strong due to purchases from the US Federal Reserve (Fed) and large institutional investors.
President Biden's infrastructure projects and the speed with which the Fed normalizes monetary policy are considered key factors in the direction of bond yields. In addition to the good data on GDP growth, we also see an increase in inflation. For the Fed, this is an occasion to start indicating intentions to raise interest rates. The European Central Bank (ECB) has published a Review of the Monetary Policy Strategy and changed the inflation target to 2%, from the previous target of "close to but below 2%". Contrary to the Fed, the ECB signals the maintenance of current key interest rate levels.
With the revival of the economy and the support of central banks and government measures, stock indices have reached record levels. The Fed's statements on the beginning of the normalization of monetary policy and the dynamics of the number of people infected with COVID-19 may cause some volatility and hesitation about the next phase of global economic recovery and volatility in financial markets.
Performance of Mutual fund Compass Global Trends
Compass Global Trends ended the month with a share price of BGN 1.6354, which is an increase of 1.28% for the month and an increase of 10.80% compared to the beginning of the year.
Price per unit of the fund for the period from April 1, 2014. until July 31, 2021.
Performance of Mutual fund Compass Euroselect
Compass Euroselect ended the month with a share price of EUR 1.0997, which is an increase of 2.89% for the month and 9.90% compared to the beginning of the year.
Price per unit of the fund for the period from July 16, 2018. until July 31, 2021.
For more detailed information about the performance of Compass Global Trends and Compass Euroselect in July and about the development of global financial markets and management expectations HERE.(BG)
However, business surveys show a decline from record levels amid the spread of COVID-19. The stock indices ended the month in positive territory, although with a slight weakening towards the end of the month. An exception to the growth in July were Chinese stocks due to the new regulations imposed on the private education and technology sectors.
A sharp yield drop of the US 10-year bond during the month erased the growth from the beginning of the year. Such a movement is usually the effect of lowered growth forecasts. In this case, against the background of record levels of the US S&P 500 index, other factors seem to be influencing. On the one hand, the proliferation of the delta variant of COVID-19 has raised concerns about growth. On the other hand, the demand for bonds was unusually strong due to purchases from the US Federal Reserve (Fed) and large institutional investors.
President Biden's infrastructure projects and the speed with which the Fed normalizes monetary policy are considered key factors in the direction of bond yields. In addition to the good data on GDP growth, we also see an increase in inflation. For the Fed, this is an occasion to start indicating intentions to raise interest rates. The European Central Bank (ECB) has published a Review of the Monetary Policy Strategy and changed the inflation target to 2%, from the previous target of "close to but below 2%". Contrary to the Fed, the ECB signals the maintenance of current key interest rate levels.
With the revival of the economy and the support of central banks and government measures, stock indices have reached record levels. The Fed's statements on the beginning of the normalization of monetary policy and the dynamics of the number of people infected with COVID-19 may cause some volatility and hesitation about the next phase of global economic recovery and volatility in financial markets.
Performance of Mutual fund Compass Global Trends
Compass Global Trends ended the month with a share price of BGN 1.6354, which is an increase of 1.28% for the month and an increase of 10.80% compared to the beginning of the year.
Price per unit of the fund for the period from April 1, 2014. until July 31, 2021.
Performance of Mutual fund Compass Euroselect
Compass Euroselect ended the month with a share price of EUR 1.0997, which is an increase of 2.89% for the month and 9.90% compared to the beginning of the year.
Price per unit of the fund for the period from July 16, 2018. until July 31, 2021.
For more detailed information about the performance of Compass Global Trends and Compass Euroselect in July and about the development of global financial markets and management expectations HERE.(BG)