Gerald Fitzgerald’s Market Review July 27th

LAST WEEK IN 30 SECONDS...

Global markets in turn pulled back last week as increasing tensions between the US and China lead markets lower. The race to successfully launch a vaccine for COVID-19 continued as major nations sought to reassure their respective citizens that they will have access to the vaccine when it comes on stream. This is as the number of cases continues to increase.

With increasing political tensions adding to the pandemic concerns, gold broke past $1,900 whilst US treasuries saw increased demand with the 10-year US Treasury yield falling by 0.04% over the week to finish at 0.59% p.a..

THIS WEEK IN 30 SECONDS...

The week ahead sees a raft of earnings announcements with over 4,000 companies providing market updates on earnings and outlook. These include a number of mega cap companies who have lead the market recovery including Amazon, Google and Mastercard.

The US Federal Reserve provides a policy statement update on Wednesday as markets look for further reassurance to dissipate agitation given the persistence of COVID-19 and intensifying political tensions. The week ahead also sees European Gross Domestic Product (GDP) releases and German Retail Sales updates on Friday. Markets will also look for improvements in US jobless claims which rose last week given further lockdowns across US states.

MARKET RECOVERIES: A TALE OF TWO REGIONS

The Global Financial Crisis may be over a decade ago yet its effect still prevails. Whilst the recovery in markets has been positive, Europe has failed to participate to the same degree, however, with the Eurofirst 300 index trailing its US counterpart the S&P500 by a considerable margin. Thus far, 2020’s crisis has seen a similar pattern.