It was a month that marked the end of the quarter and hence, there was the inevitable end-of-quarter surge marked by rumours surrounding an eventual settlement between Deutsche Bank and the US Department of Justice. It was the month that the Federal Reserve threatened to act but eventually and unsurprisingly, didn’t. That allowed the S&P 500 to finish the month on a slightly positive note on a total return basis. The index was up 0.02%. That was a flat performance. Eurozone stocks were slightly better. They were up 0.67% during the month, in US dollar terms. Emerging market stocks turned in a reasonable performance with a total return of 1.32%. India lost 1% whereas Asia ex-Japan was much better with a return of 1.65%. China and Russia which had drawn closer politically were also strong stock market performers with gains of 2.55% and 3.87% respectively during the month. Despite the Bank of Japan appearing more confused, Japan stocks ended the month on a positive note with a total return of 1.32%.
Bonds – emerging or developed – had a relatively quiet month. However, commodities, oil in particular, had a strong month. Commodities (S&P Goldman Commodities Total Return Index) were up 4.1% while the West Texas Intermediate crude price gained 7.9% during the month, on the back of a supposed OPEC decision to freeze and reduce supply. The gains may be short-lived.
In short, it was a month that the cookie held up again and did not crumble. Therefore, the risk remains.