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Market highlights: Week ending 17th July 2020

MARKET SUMMARY

Last week saw the S&P 500 briefly return to positive territory Year-to-date and is now hovering just ~5.0% short of all-time high levels. An increasingly negative virus outlook weighed on markets at the start of the week. Record daily increases in cases continued with the U.S. death toll surpassing 142,000. Promising data from vaccine clinical trials later in the week helped ease market concerns as Pfizer, Moderna, & Oxford remain on course in the race to find a vaccine. Dr. Anthony Fauci, the U.S’s top infectious disease official, stated on Wednesday that he believes the U.S. will have a coronavirus vaccine by year-end.

EQUITIES

The S&P briefly returned to the pre-pandemic levels of late February this week, pushed higher by industrials as technology faltered somewhat, reducing the vast YTD gap between value and growth somewhat.

BOND YIELDS

Yields remained anchored with virus cases continuing to surge, new fiscal response negotiations still ongoing, and core CPI still well below the FED’s 2.0% annual inflation target.

CURRENCIES

The Dollar slide resumed this week. The Euro reached its highest level since March as EU leaders inched closed to breaking an impasse over a proposed 750-billion-euro recovery fund.

COMMODITIES

Commodities were relatively dormant this week. Gold remained above 1,800/oz as escalating numbers of the coronavirus continues to raise questions over the pace of the economic recovery.

SECTOR BREAKDOWN

J.P Morgan Chase Asset Management

MARKET OUTLOOK

The week starts with two economic stimulus packages in focus. In Washington, lawmakers will begin negotiations on a new stimulus package expected to be worth between $1–1.5 Trillion. This will be the 5th U.S stimulus package since the pandemic started and holds significant importance as a raft of earlier measures are due to expire in the coming weeks.

In Europe, the proposed 750 Billion Euro recovery fund negotiation drags on and will be the focal point for European market participants.

The stock market looks set for another bumpy ride this week. Participants will continue to weigh-up the increasingly uncertain timeline of the virus against renewed Fiscal response and the emergence of multiple vaccine candidates.

Explainer of investment stuff, starting an investment blog to help cure my procrastination