Gerald Fitzgerald’s Market Review 29th June

LAST WEEK IN 30 SECONDS...

Last week was a case of déjà vu as the failure to mitigate Covid-19 saw further spikes in cases of the virus across the US. The resultant secondary shutdown saw investor optimism wane with the previous week’s market gains erased. Investor concern had already been heightened as the International Monetary Fund branded the current environment “A crisis like no other, an uncertain recovery” and revised global growth for 2020 down to -4.9%, 1.9% below its last update in April.

Global Equities in euro terms finished the week down -2.4% with gold finishing the week up 1.1% and the Euro gaining versus its developed currency peers.

THIS WEEK IN 30 SECONDS...

The week ahead sees investors look to central banks and governments alike for further market support given the increase in Covid-19 uncertainty. Elsewhere, Brexit discussions revert into the limelight as efforts are made to reach a trade agreement in advance of the decoupling from the European Union.

From an economic point of view, Eurozone inflation updates are due for release on Tuesday, which is largely expected to hover around the previous month’s disclosure of 0.1%, well below the ECB’s target of just under 2%. Across the Atlantic, US unemployment numbers are due for release on Thursday.

INVESTOR CAUTION - ESG ALARMS ARE RINGING

Environmental, Social and Governance (ESG) breaches were clearly evident last week. In the space of a few days, we saw the temperature in the Arctic Circle mind-bogglingly breach 38 degrees Celsius, Wirecard entering insolvency due to accounting irregularities, and Facebook seeing its share price slump as revenues were hit due to its inaction at tackling hate speech on its platform. Companies not managing their ESG risks appropriately will ultimately be borne by investors.