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Market Update

Market Update – August 2020

Global – Slow recovery U.S. equities delivered stellar performance with the S&P 500, the Dow Jones Industrial and the NASDAQ all reaching record new levels. The S&P 500 returned 7.2% and the Dow Jones 7.6%. U.S./China tensions continued to escalate moving from rhetoric to closing consulates and banning individuals. Whilst economic data remained very patchy it continued to demonstrate a mild improvement but a slowed recovery. The Federal Reserve signaled its intention to offer further monetary stimulus to the economy if necessary and indicated a move to ensure increased flexibility in this regard by adjusting its measurement of inflation. Read the full article

Market Update – July 2020

Global – Global equity markets surprised on the upside with the MSCI Emerging Market Index U.S. The severity of the economic impact of the coronavirus was amply demonstrated by the US GDP for Q2 declining by an annualised rate of 32.9% compared with the previous quarter. While this confirms the extent of the economic decline, investors have been more focused on the recovery aspects displayed by some economic data. US retail sales grew 5.6% in June following on the record rise of 8.5% in May driven largely by those unemployed receiving support measures from the US government. It provided $1,200 stimulus cheques as well as $600 per week in unemployment benefits. As consumer spend is the main driver of U.S. GDP these relief measures helped keep the economy ticking over. The S&P 500 returned 5.6%. Read the full article

Market Update – May 2020

Global – COVID-19 Lockdown ease U.S. equities performed well in May as investors took heart from the proposed easing of lockdown restrictions in almost all U.S. states, as well as in many other countries around the world. Market optimism remained positive despite confirmation that the economy had contracted in Q1 even further than was at first indicated. This was the first negative economic growth since Q4 2008. At the heart of this economic slowdown was the sharp decline in consumer spending which is the lifeblood of the American economy. This was further exacerbated by concerns over a possible deterioration in U.S./China trade negotiations. All sectors in the S&P 500 rose with the index returning 4.8%. I.T stocks were again the best performers. Read the full article

Market Update – April 2020

Following a disastrous month in March. Global markets rebounded strongly in April as some countries experienced a decline in new Covid-19 infection rates and were planning a gradual re-opening of their economies. Governments and central banks were quick to respond to the impending economic crisis and introduced significant stimulus measures to counter the mayhem caused by the economic shutdown. Market volatility declined with the MSCI World Index returning 10.9% for the month and outperforming the MSCI Emerging Market Index which returned 9.2%, albeit from a low base. Read the full article

Market Update – October 2019

Global developed markets sold off some 2.2% Global developed markets sold off some 2.2% at the beginning of the month as October kicked off with an escalation in geopolitical tension. This came after US government considered delisting Chinese companies from major US stock exchanges in its efforts to reduce US investments into China as the trade war endures. Towards the middle of the month both nations attempted to deescalate the trade war in hopes of signing a partial trade deal in the near future. To this end, the US postponed the 15th October 2019 deadline that it imposed on China which would have seen an additional 5% tariff increase from 25% to 30% on $250 billion of Chinese goods. In return China would buy US agricultural produce. Read the full article

Market Update – August 2019

Global markets took a shot to the gut As the month kicked off with an escalation in the US-China trade war. While markets were anticipating another stalled resolution to the trade negotiations none expected the US president to impose a 10% tariff on further $300 billion worth of Chinese goods. To this China hit back hard in two ways. Firstly China allowed its currency relative to the US dollar to fall to the lowest level in a decade which mitigated the intended impact of the previously imposed US tariffs as it made exports to the US more affordable. Read the full article

Market Update – July 2019

Global markets started the month on a positive note. As the US and China agreed to resume trade talks along with no new tariffs increases and for the US to ease previously imposed restrictions on Huawei. This was short lived as the US proposed increased tariffs towards the middle of the month, further exasperating already elevated levels of geopolitical tension amid deteriorating global trade. While central banks have adopted a dovish approach to interest rates in order to stimulate growth, the effects of the global risk off environment which ensued, could not be completely mitigated. Read the full article

Market Update – May 2019

Global – Risk-off prevails United States The US government increased tariffs on an additional $200 billion of Chinese goods from 10% to 25% with China responding with a tariff hike on $60 billion of US imports. Furthermore, the US administration imposed punitive measures on the Chinese tech-giant Huawei as well as threatening to impose a 5% tariff on all imports from Mexico. Once the Chinese trade talks broke down, these moves put the skids under the New York markets. The S&P 500 returned -6.4%. Economic data remained positive with the Federal Reserve maintaining its dovish approach to interest rates and employment continued to rise. 263 000 new jobs were created resulting in total unemployment declining to 3.6%. Consumer confidence remained on the up climb from 129.2 in April to 134.1 in May. However, manufacturing slowed with May’s PMI coming in...
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Market Update – April 2019

Global – A booming US United States of America Economic data emanating from the US continued to outstrip expectations resulting in significant risk-on appetite and driving equities to all-time highs. Far better than expected Q1 GDP numbers came in at 3.2% while employment numbers grew by 196,000 in March and the unemployment rate remained at 3.8%. These factors coupled with the continuing dovish approach to interest rates on the part of the Federal Reserve kept the markets buoyant. Earnings results provided additional stimulus to the markets with technology stocks Amazon and Twitter delivering spectacular numbers. Market performance in the tech sector at month end was somewhat soured by results from Alphabet, the holding company of Google, which delivered disappointing results. The Financial sector was the best performer. Read the full article

Market Update – February 2019

Global – A trade peace? US equities continued to improve in February as economic data indicated a stable economy. GDP growth quarter-on-quarter for Q4 came in at 2.6% which was an improvement on economists’ forecasts of 2.2% but considerably lower than Q3 growth of 3.4%. Growth in Q1 2019 is expected to reflect a slowdown in the economy. Employment levels remained buoyant. Markets continued to enjoy their winning streak, bolstered by renewed hopes for a US/China trade war settlement together with the Federal Reserve’s confirmation of a more dovish approach to interest rate policy. The US has temporarily suspended the imposition of increased tariffs on $200 billion of Chinese goods that was scheduled to be imposed from 1 March. The Dow Jones Industrial Average returned a positive 3.7% followed by the S&P 500 which returned 3.0%. Read the full article
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