Gerald Fitzgerald’s Market Review April 6th

LAST WEEK IN 30 SECONDS...

Last week saw equities marginally pare gains from the previous week. Donald Trump asserted a significant infrastructure budget should be put in place helping generate positive market momentum amidst stuttering sentiment given the amplification of coronavirus cases and rise in 10 million jobless claims in the US. The decision by OPEC, Russia and wider interested parties to set up a meeting helped oil rebound strongly with Brent Crude up +37.4% to finish the week at over $34.

Despite the market fragility over the week, euro investors were cushioned by a notably weaker euro protecting investors. The euro fell -2.3% versus the US dollar and -2.1% versus the yen. Global equities in euro terms finished the week down -0.3%.

THIS WEEK IN 30 SECONDS...

With Q1 ending investors await updated corporate earnings results. This week will see some early disclosures from companies including Delta Airlines on Thursday, albeit the results are expected to be a shadow of previous quarters.

The control of coronavirus shows no signs of slowing in the US with over 330 thousand cases and 9 thousand deaths. Signs are more optimistic, however, with some European governments planning to ease some restrictions as they gain control over the rate of infections.

Elsewhere, OPEC+, including Russia and Saudi Arabia, are due to meet on Thursday as reconciliation is sought to stabilise oil prices.

GOLD WEIGHS IN GREATER THAN OIL BUT NOT EQUITIES

Gold is seen as a store of value and an inflation protector. Comparing global equities, emerging market equities and oil prices to gold prices since 1988, however, equities come out on top. Whilst emerging market equites in $ terms has gained +70% more relative to gold over the period, oil prices have crashed losing -40% in value compared to gold.