Gerald Fitzgerald’s Market Review August 17th

LAST WEEK IN 30 SECONDS...

UK GDP fell by 20.4% in Q2 2020 compounding a Q1 GDP fall of 2.2%, with the UK officially entering a recession given two quarters of negative growth. This, however, did not stop UK equities rising by 1.1% over the week. More generally, markets added further gains last week with global equities now -3.3% for the year to date in euro terms.

The euro made furthers gains against the US dollar. Volatility amongst gold continued last week with the precious commodity falling by 4.5% whilst highly rated Eurozone government bond yields rose higher, with 10-year US treasury yields 0.15% higher.

THIS WEEK IN 30 SECONDS...

The week ahead is quiet from an economic disclosure perspective. Eurozone inflation updates are due for release on Wednesday whilst Eurozone manufacturing and services PMIs are released on Friday.

Corporate earnings disclosures continue this week including updates from Walmart, Analog Devices and AIA Group. Meanwhile, the upcoming US presidential election sees further media scrutiny applied to both Joe Biden and Donald Trump’s respective presidential platforms as they vie for electorate support. With the ongoing effects of the coronavirus, healthcare and promises of continued financial support will form a significant component of each candidates’ manifesto.

AMAZON THE DISCRETIONARY LEADER

Performance globally across sectors has seen significant variation year-to-date with Consumer Discretionary one of the better performing sectors. On closer investigation, however, this sector has benefited significantly from Amazon which has appreciated by over 70% over the period and now accounts for over a quarter of the overall sector.