The Australian share market edged marginally higher in July advancing by 0.5% despite Victoria moving into stage 4 COVID lockdown leading to a sharp negative revision to Australia’s economic outlook. The mining and gold sectors were the standouts, propelled higher by the gold price up 10.3% and iron ore 5% higher, offset by weakness in the energy sector. Gold is traditionally a hedge for uncertainty and also reflects the weakness the global reserve currency the USD.
In the US, the technology stocks continued to power ahead with the NASDAQ 6.8% higher outpacing the broader S&P 500, which improved 5.5%. Mainland China was the standout performer for the month, up 12.3% as its economy has kick-started post COVID ahead of the western world and was the principle driver of iron ore demand. The UK has experienced one of the heaviest COVID mortality rates with severe restrictions pushing its market down 4.4%. Bond markets were very subdued and comfortably absorbed new issuance used to finance burgeoning government deficits.