Week from 13 to 19 July 2020
Equity markets rounded off the week with mixed results. In the U.S., the Russell 2000 surged 3.56% and the S&P 500 rose 1.25% though new COVID-19 cases were on the rise (77,200 on Thursday: as a result, California has just shut down all indoor activities) and jobs recovery seemed to lose steam. By contrast, the NASDAQ Composite closed lower (-1.08%) after FAANMG stocks came under heavy pressure (Microsoft down 5.05%, Amazon down 7.44%, Netflix down 10.16% as its EPS figure fell short of analysts’ consensus forecast and its forward guidance of 2.5mio subscriber additions in Q3 disappointed Wall Street).
European stock markets traded higher (MSCI EMU up 1 .71%, FTSE 100 up 3.20%) despite weak U.K. economic data and the lack of agreement on the €750bn rescue package.
Most APAC equity markets also finished in positive territory (NIKKEI 225: + 1.82%, NIFTY 50: +1.24%, S&P/ASX 200: +1.93%, KOSPI: +2.37%) except for China (Shanghai Composite losing 5%). However, the Chinese industrial output beat expectations in June (+4.8%), but this good news was unfortunately counterbalanced by weakness in retail sales (-1.8%), which raises some doubt about the sustainability of economic growth.
Among the S&P sectors, the landscape has changed dramatically. Consumer discretionary (-1.62%), technology (-1.16%) and communication services (-0.93%) lagged behind last week’s losers which led the pack this time (industrials: +5.6%, materials: +5.44%, and health care: +5.09%, boosted by a jump in Moderna Therapeutics (+51.5% WTD) on reports the European Union is in talks with various drug makers to purchase millions of doses of COVID-19 vaccines).
It was a period of dead calm for Govies (yields unchanged on the 10-year U.S. and German bonds). On the other hand, credit markets fared well (IG EUR +0.35%, IG USD: +0.72%, HY EUR: +0.47%, HY USD: +1.2%) with the exception of emerging debt (down 0.11% in local currencies).
Lastly, gold continued its 5-week winning streak (+0.45%) in spite of optimism towards a COVID-19 vaccine and treatment drugs.
Find the full report here: https://www.trackinsight.com/en/weekly-flow-report/2020-07-17/global
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