Monthly round-up - July 2025 – trade “agreements” mainly benefit US equities

As we anticipated, the trade “deals” concluded in July mainly benefited US equities, which once again outperformed in July their European counterparts. In Europe, the strongest performances were recorded by cyclical sectors, particularly banks, but also energy, two sectors that we upgraded to Overweight at the beginning of July and in mid-June. Companies and sectors exposed to USD risk suffered, as did media (-6.3%). Value continues to outperform Growth, and European sovereign long rates continue to rise. We maintain our preference for US equities (Overweight) vs European equities (Marketweight) and, in Europe, our preference for financials, energy and civil aerospace. Tomorrow, beyond the continuation of the earnings season, monetary issues (the Fed this evening, Jackson Hole at the end of August) will, together with trade tariff topics, take centre stage.