USA - quarter 2 commentary from AEGON Asset Management
In the second quarter, the Dow Jones index fell 7.4% and the S&P 500 fell 3.2%. The NASDAQ was a relative outperformer, closing the period in positive territory (0.6%).
The best performing sector was energy as oil and gas prices rallied to new highs. Utilities was the second best performing sector, driven by the benefits of rising power prices and an element of a flight to safety. The financial sector performed very poorly, driven by massive write-downs and attendant earnings uncertainty. Overall the sector fell 19%, with the biggest drops in the mortgage sub-sector, banks, capital markets and insurance. The industrial sector was also under pressure over the quarter falling 10.6% as investors fretted over the early demise of the aerospace cycle due to higher jet fuel prices and the credit crunch, a slowing of global growth and margin pressure due to soaring input costs. Consumer discretionary stocks were sluggish (-8.1%).