Back to normalcy?

. In Europe and the Nordics, however, the picture was rather mixed. The STOXX Europe 600 fell by 1.2%, reversing the story of the first five months of 2025 – where European markets rose while the US stagnated. The Norwegian market, lifted by rising oil prices, was a notable European exception, rising by about 4%.

Interest rates and credit spreads fell in the US, as you’d expect when equity markets rally. In Europe, market rates edged higher, despite the ECB cutting its key rate by another 25 basis points, and the tightening of credit spreads was more muted – as you’d expect when share prices move sideways.

Other developments also instilled a sense of normalcy. The CBOE Implied Correlation Index dropped sharply, signalling that stocks move more independently again. Correlations tend to rise in times of stress or panic – as in April this year.

Similarly, volatility fell back to more moderate levels, following spikes in Q1 and April, reflecting a calmer investor sentiment – despite lingering concerns about geopolitics, inflation, and the burgeoning US budget deficit. It’s indeed as if we’re seeing a return to normalcy.

Obviously, there is more to worry about. We may not need to look further than 9 July, when President Trump’s 90-day tariff pause expires. What will happen is anybody’s guess, perhaps even his. But whether or not he jolts the market once again, I know there will be plenty of months ahead when I can once again use the word normalcy. The bumpy ones in between are what you’re getting paid to endure.

In the meantime, as Nordic markets ease into holiday mode: Have a wonderful summer!

Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on, market developments, the portfolio manager’s skill, the fund’s risk profile, as well as fees for subscription, management and redemption. Returns may become negative as a result of negative price developments. This is marketing communication.