Gerald Fitzgeralds Market Review July 20th

LAST WEEK IN 30 SECONDS...

Global markets lacked direction last week as clusters of COVID-19 cases heightened concern amongst nations. In the US confirmed cases of COVID-19 are exceeding 70,000 per day whilst developing countries like South Africa and India are struggling to contain the virus with more limited health infrastructure. Global equities finished the week 0.6% higher.

Volatility in commodity markets over the period was relatively benign compared to recent weeks. Gold finished the week marginally higher at $1,810 as the commodity continues to remain attractive given the ongoing uncertainty on the containment of COIVD-19.

THIS WEEK IN 30 SECONDS...

Q2 earnings disclosures ramp up further this week with over 1,800 company announcements due. Tesla issues its update on Wednesday and with its share price up fivefold in the past 12 months, expectations will be high for a positive outlook. Other notable updates include Microsoft, Intel, Coca-Cola and Unilever.

From an economic point of view, Eurozone PMI updates are due for release on Friday with further improvements anticipated. Investors will want to see these metrics rise above 50 indicating that service and manufacturing is no longer in contraction. Elsewhere, discussions continue within the European Commission on finding an agreeable resolution to apportioning COVID-19 recovery funds across member states.

EURO CREEPING HIGHER VERSUS STERLING

Brexit may not have garnered as many headlines in recent weeks given other pressing matters, yet the countdown to the transitional deadline of 31 December 2020 remains. With the passing of time and necessity to agree trade terms in advance, Sterling has moved weaker against the Euro in recent months. The Euro is now 7.5% stronger over the year-to-date.