Opportunities still exist for the canny and disciplined. Pic via Getty Images<\/p>\n
Global equity markets have reached fresh record levels, supported by softer US inflation figures and growing expectations that the Federal Reserve will cut interest rates in September.<\/p>\n
It\u2019s an impressive run, but I believe the enthusiasm may be running ahead of the underlying reality.<\/p>\n
August rallies are not unusual, and they often have more to do with seasonal trading dynamics than with a meaningful shift in economic conditions.<\/p>\n
Lower volumes, repositioning by institutional investors, and a tendency for sentiment to swing quickly can all magnify price movements during the summer. This year\u2019s surge has the hallmarks of that pattern.<\/p>\n
The latest moves were fuelled by data showing inflation rising less than forecast, easing fears that tariffs were adding upward pressure to consumer prices.<\/p>\n
On Tuesday, the S&P 500 closed 1.1% higher at 6,445.76, the Nasdaq gained 1.4% to 21,681.90, and the Dow Jones added 483 points to finish at 44,458.61. The Russell 2000 outperformed with a jump of nearly 3%, as traders positioned for cheaper credit ahead.<\/p>\n
Futures markets now put the probability of a September rate cut near certainty, and some are even betting on a more aggressive 50 basis-point move after US Treasury Secretary Scott Bessent called for stronger action. But rate expectations can shift rapidly. A single data release, or a change in tone from policymakers at the Jackson Hole symposium later this month, could reset the market\u2019s assumptions.<\/p>\n
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Opportunity and risk \u2013 discipline is key<\/p>\n
Earnings season is also sending mixed signals. Cava shares fell more than 22% after the restaurant chain reported weaker-than-expected revenue growth and cut its full-year forecast. In a truly broad-based rally, we would expect to see consistent earnings beats and upgraded guidance across sectors \u2013 something the current market has yet to deliver.<\/p>\n
Global economic conditions remain uneven. The US economy is performing better than many expected earlier this year, but Europe\u2019s recovery is still patchy, Asian markets remain volatile, and US-China trade negotiations continue against a backdrop of tension, particularly in technology and semiconductors. Any deterioration in these areas could quickly undermine investor confidence.<\/p>\n
This is why I see the current market as offering both opportunity and risk.<\/p>\n
Participating in the upside is possible \u2013 but only with a clear understanding of what\u2019s driving the move and a willingness to manage exposure if conditions change. Price action driven by sentiment and positioning can reverse just as fast as it climbs.<\/p>\n
August often gives the illusion of stability before reality reasserts itself in the autumn. For investors, this is a time to remain disciplined, assess whether portfolio gains are built on solid ground, and ensure that risk management plans are in place. It\u2019s one thing to benefit from short-term momentum; it\u2019s another to depend on it.<\/p>\n
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Nigel Green, is the group CEO and founder of deVere Group, an independent global financial consultancy.<\/p>\n
The views, information, or opinions expressed in the interviews in this article are solely those of the author and do not represent the views of Stockhead.<\/p>\n
Stockhead does not provide, endorse or otherwise assume responsibility for any financial advice contained in this article.<\/p>\n","protected":false},"excerpt":{"rendered":"Opportunities still exist for the canny and disciplined. Pic via Getty Images Global equity markets have reached fresh…\n","protected":false},"author":2,"featured_media":68618,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,63,99,171],"class_list":{"0":"post-68617","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-markets"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/68617","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=68617"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/68617\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/68618"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=68617"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=68617"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=68617"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}