Markets recover in July, as improved earnings help U.S. stocks.
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US economic data continued to confirm a rebound after the soft winter months, highlighted by solid second-quarter growth. Yet, the Greek debt saga continued to distract global markets until a temporary deal was struck by mid-month. Thereafter, China quickly became the worry du jour, which hammered commodities, especially crude oil and gold. That took down emerging markets, wiping out prior 2015 gains. Conversely, developed markets stocks recovered, led by Europe as well as the US, which were saved by improved second-quarter earnings. REITs rebounded sharply in July though remain down for the year. US small caps were an outlier, down for the month, as were energy stocks. The yield on the 10-year US treasury fell as investors scrambled for safety during the Greek debt worries, and then recovered, before slipping to end the month lower amid concerns about global growth, China, along with the pace and timing of Fed rate hikes. Despite the fall in yields, bond indices were mixed in July, though largely positive.
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