Pitcher of Wealth – Markets performance review in July 2026
Equities
Table 1: Global and Australian sector price returns for July 2026
| Market/sector | Australian equities | Global equities |
| Overall market | +2.3% | –1.2% |
| Consumer Discretionary | +0.9% | +0.1% |
| Consumer Staples | +0.0% | +0.6% |
| Energy | +12.2% | +10.8% |
| Financials | +5.8% | +4.6% |
| Healthcare | +2.3% | -0.3% |
| Industrials | -1.4% | -2.8% |
| Information Technology | -2.8% | -5.7% |
| Materials | -0.9% | -2.4% |
| Real Estate | -0.4% | +1.3% |
| Communication Services | +1.0% | -1.5% |
| Utilities | -1.0% | -3.3% |
Source: Bloomberg; Australian Equities: S&P/ASX 200 Index, Global Equities: MSCI World ex Australia Index in AUD
Global
Global markets were down 1.2% in July with weakness in the Information Technology sector (down 5.7%) and, the Utilities (down 3.3%) and Industrials (down 2.8%) also contributing with subdued performance. Energy stocks were a notable point of strength (up 10.8%) following a resurgence in Middle East hostilities with Iranian and American forces trading blows across the region and undermining attempts to negotiate a lasting peace. This saw traffic through the Strait of Hormuz become limited once again with a flow-on uplift to energy prices and bounce back to energy stock share prices from the subsequent earnings boost. Financials (up 4.6%) were also a point of difference with market volatility coupled with strong deal flow related to US public listings (e.g. SpaceX) and AI financing efforts driving positive earnings surprises that were well-received by investors.
A rebound in the Australian dollar, up 1.5% against the US dollar, was also a notable headwind to global equity positions as investors revised expectations for US interest rate hikes relative to their RBA outlook.
The weakness in Technology names was driven by a range of factors. Excessive borrowing to invest in popular technology names via margin loans and geared ETFs met a range of liquidity shocks including public offerings for SpaceX shares, the US-listing of SK Hynix shares. There was also weakening sentiment following a range of AI developments out of China including the public listing of Chinese memory manufacturer CMXT as well as a new AI model, Kimi K3 by Chinese startup Moonshot AI that raised competition fears. The combination of these drivers saw leveraged positions be unwound and helped driven share prices across the sector lower.
Finally, despite the geopolitical concerns in the Middle East and elsewhere we saw US equities continue to perform strongly. The snapshot below highlights annual revenue growth for the June quarter versus expectations on 30 June and we see broad-based strength with Utilities the only noteworthy point of weakness. In aggregate earnings have surprised by 9.2%, above the 10-year average with this marking a seventh consecutive quarter of double-digit earnings growth whilst revenues have also surprised on the upside by 2.9% currently, the highest since the June 2022 quarter[1]
.
S&P 500 revenue growth year-on-year: Q2 2026
Source: FactSet
In aggregate we saw a pullback in some AI enthusiasm, violently so for some segments but the overall market story appears to be broadly healthy with strength being shown across almost all sectors. The Middle Eastern conflict does remain a point of concern although early reports of new US-Iran negotiations[2] following de-escalation by the US may alleviate this concern as well.
Australia
The Australian market showcased surprising strength ahead of reporting season with the Energy sector (up 12.2%) following the lead of global peers on Middle East fears followed by our Financials sector (up 5.8%) and Health Care (up 2.3%). The Financials strength appeared to be driven by a mix of factors including safe-haven demand as investors sought domestic-facing exposure amidst a resumption of US-Iran hostilities. Another factor according to some reports was the unwind of AI-focused trades elsewhere in Asia-Pacific markets where Australian banks were being used as a funding “short” (basically borrowing bank shares to bet on AI names such as SK Hynix) which subsequently unwound violently when these trades underperformed forcing fund managers to buy back bank shares and pushing share prices higher as a result.
Information Technology (down 2.8%), Industrials (down 1.4%) and Utilities (down 1%) were laggards in July. Technology names tend to trade in line with global peers so the selloff in growth names offshore did not see them spared. Industrials were weighed down by the performance of Qantas (down 6.3%) as investors reacted to a pickup in energy prices due to the Middle East conflict. Meanwhile higher bond yields weighed on sectors such as Utilities and Real Estate where the higher leverage employed creates greater sensitivity to changes in financing costs given the impact on profitability.
Key company news for the month included:
- CSL (up 7.3%): The company was buoyed by investors seeking potential safe havens amidst geopolitical volatility. Towards month-end the company flagged progress in clinical trials for a new Horizon 2 process that promises to substantially improve the amount of immunoglobulin it can harvest from a given base amount of plasma. Pending approval this would ease production costs and be a positive tailwind for earnings which saw investors react favourably to the news.
- Pexa (down 28%): The draft regulation by IPART exceeded many investors’ worst-case scenarios. The regulator IPART is effectively proposing material limits on Pexa’s pricing power in how it determined the draft regulatory framework for pricing transaction services going forward. This translates into structurally lower profitability for the core Australian business with the selloff a reflection of the market’s surprise at the severity of the IPART decision. In addition, the recent Budget changes to curtail investor involvement in the property sector appear to be slowing transaction activity markedly posing a near-term headwind to revenues.
Appendix
Table 2: Asset class performance to 31 July 2026
| Annualised | |||||||
| Asset Class | 1-mth | 3-mth | 6-mth | 1-yr | 3-yr | 5-yr | |
| Equities | Australia | 2.3% | 4.1% | 2.9% | 6.0% | 10.4% | 8.0% |
| Australia – Small Caps | -3.2% | -3.2% | -13.2% | 1.8% | 7.5% | 2.2% | |
| International | -0.9% | 6.8% | 7.6% | 10.4% | 16.6% | 12.3% | |
| International – Hedged | 0.3% | 5.2% | 8.6% | 20.5% | 17.7% | 10.9% | |
| International – Small Caps | -3.8% | 5.6% | 8.0% | 15.4% | 13.4% | 8.2% | |
| Emerging Markets | -4.4% | 7.3% | 10.0% | 25.1% | 17.7% | 9.0% | |
| Australia – REITs | -0.1% | 4.7% | -2.7% | -5.4% | 10.2% | 5.6% | |
| International – REITs (H) | 2.3% | 3.7% | 9.3% | 17.3% | 8.7% | 1.5% | |
| International – Infrastructure (H) | 0.2% | 1.0% | 8.4% | 15.6% | 11.5% | 7.5% | |
| Alternatives | Gold | -0.5% | -10.2% | -18.0% | 12.6% | 25.4% | 18.5% |
| Managed Futures (USD) | 1.0% | 1.9% | 7.5% | 28.1% | 9.7% | 9.1% | |
| Global Cat Bonds (USD) | 1.1% | 2.7% | 4.6% | 12.4% | 13.8% | 10.5% | |
| Global Hybrids (AUD hedged) | 0.0% | 1.7% | 1.9% | 6.6% | 10.6% | 3.2% | |
|
Cash and fixed Income |
Australian Bonds | -0.4% | 2.1% | 1.6% | 1.1% | 3.7% | -0.1% |
| Australia – Inflation-linked | -0.3% | 1.1% | 2.1% | 2.4% | 2.9% | 0.3% | |
| Australia – Corporate | -0.1% | 2.2% | 1.9% | 2.4% | 5.2% | 1.8% | |
| International Bonds | -0.9% | 0.2% | 0.0% | 2.1% | 3.4% | -0.5% | |
| International – Corporate | -1.2% | 0.1% | -0.3% | 2.7% | 4.4% | -0.5% | |
| US Private Debt BDCs (USD) | -0.7% | -4.6% | -7.4% | -14.4% | 2.3% | 4.6% | |
| Australia – Subordinated Debt | 0.5% | 1.5% | 2.5% | 6.0% | 6.5% | 4.9% | |
| Australia – Floating Rate | 0.4% | 1.4% | 2.4% | 4.9% | 5.3% | 3.9% | |
| Australia – Cash | 0.4% | 1.1% | 2.1% | 3.9% | 4.2% | 3.2% | |
Source: Bloomberg
Note: the above are total returns assuming dividends are reinvested shown in Australian dollar terms unless otherwise specified.
[1] J. Butters, ‘S&P 500 Earnings Season Update: July 31 2026’, FactSet (31 July 2026), S&P 500 Earnings Season Update: July 31, 2026, (accessed 2 August 2026).
[2] B. Debusmann Jr, ‘Trump suggests new talks with Iran to begin on Monday’, BBC (3 August 2026), Trump says new talks with Iran to begin on Monday (accessed 4 August 2026).
