Monthly report July 2026

Renewed tensions in the Middle East, including further US attacks on Iran and attacks on ships in the Strait of Hormuz, weighed on global financial markets in recent weeks. Ongoing disruptions to key shipping routes briefly pushed the oil price back up to USD 100. At the end of the month, oil was trading at USD 90, more than 20% above its level at the end of June.

Despite this, most global equity markets managed to maintain or slightly improve their levels. The SPI, the DAX (in EUR) and the MSCI World Index (in USD) gained 0.7%, 2.5% and 0.5%, respectively. Growing concerns about the sustainability and financing of investments in AI infrastructure weighed significantly on technology stocks, resulting in declines of 0.1% in the S&P 500 and, more notably, 6.6% in the technology-heavy Nasdaq 100 Index and 3.0% in the MSCI Emerging Markets Index (all in USD).

The renewed rise in energy prices fuelled inflation concerns and caused long-term interest rates to increase across all major currency regions. The yield on 10-year US Treasury bonds climbed to its highest level since January 2025, while yields on German government bonds in the eurozone reached 3.2%. Central banks in the US and the eurozone left their key interest rates unchanged for the time being. Bond indices declined by between 1.5% and 2.0% in July.

Strong corporate results, but little impact on markets in July

With around half of the companies in the S&P 500 having reported their second-quarter 2026 results, the earnings season can be described as very strong. Compared with the same quarter of the previous year, aggregate corporate earnings have increased by more than 25%. Driven by substantial investment in artificial intelligence (AI), earnings growth in the Nasdaq 100 Index has been even stronger, at more than 40%.

Beyond the US indices, markets in Europe, Asia and the emerging markets are also showing very strong earnings momentum, in some cases significantly exceeding analysts’ expectations. So far, however, these strong corporate results have had little positive impact on market performance, as they have been overshadowed by the geopolitical events of recent weeks.

Concerns about a sustained supply shortage of key energy sources such as oil and gas led to another rise in prices in July. The longer the conflict continues, and particularly the longer key transport routes remain effectively blocked, the greater the likely negative impact. For the time being, energy prices can be kept at an acceptable level through a combination of alternative supply routes, the use of emergency reserves, lower demand and increased production by other producers.

Fund and mandate performance

The reporting season is also in full swing in Switzerland. Virtually all of our portfolio companies were able to at least meet analysts’ expectations with their second-quarter or first-half results, and in many cases exceeded them. As in other markets, however, investors have so far reacted cautiously to many of these strong results.

With a gain of 0.8%, Swiss Equity Dividend Yield (F) kept pace with the SPI, while Swiss Equity (F), Swiss Mid & Small Cap Equity (F) and Swiss Flex (F) underperformed their respective benchmarks. In a challenging market environment for bonds, Global Bonds (F) declined slightly less than its benchmark. The year-to-date performance of the funds and mandates can be accessed via the link below.

Outlook

The strong momentum in corporate earnings has created considerable upside potential in many areas, which could be realised if the geopolitical situation eases. On the other hand, a further escalation in the Middle East and a prolonged blockade of key transport routes for oil and gas remain the greatest short-term risks to global financial markets.

Best regards
Matthias Hug and Markus Lackner

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