Week in Review
Week ending April 17th 2020
MARKET SUMMARY
Stock markets climbed again this week to record their longest run since the highs witnessed in mid-February. Faint hopes of a successful anti-viral treatment and speculation that the American economy would begin to emerge from lockdown was enough to overshadow some of the worst economic data in history. Markets rallied late in the week as Gilead Sciences reported ‘rapid recoveries’ from one of its anti-viral testing groups in Chicago and Trump unveiled his ‘opening up America’ plan.
EQUITIES
With infection rates now visibly past their peak in Europe, governments look set to ease their lockdown protocols in a bid to take the first steps in restarting the global economy.
BOND YIELDS
Treasury yields remained anchored as the Federal reserve continue their ‘kitchen sink’ approach to help ensure market liquidity.
CURRENCIES
Currency movements were muted over the week as talks of reopening the economy and advances in anti-viral treatments continued to slow the markets flight-to-safety.
COMMODITIES
The misery continued for the oil industry as crude fell to an 18-year low. The severe demand contraction is now leading to storage fears despite agreements to reduce production by almost 10 million barrels a day.
SECTOR BREAKDOWN
MARKET OUTLOOK
The U.S. Jobless surge hit over 22 million this week , retail sales figures were down 8.7% and manufacturing was down 6.3%, both recording their worst monthly decline in history. Despite the relentless flow of unprecedented economic data, it is evidently clear that investors are determined to look past the dismal near-term fundamental data and focusing instead on easing of restrictions and medical breakthroughs. While there has been positive indicators on both fronts in recent weeks, the reality is, we are still a long way from normality. With the possibility of a second wave of the virus emerging as economies re-open, medical treatments still at the earliest stage of developments and a testing Q1 earnings season now under way, proceed with caution.
