Gerald Fitzgerald’s Market Review May 11th

LAST WEEK IN 30 SECONDS...

The tech heavy US domiciled NASDAQ swung into the green for the year to date as positive sentiment and strong corporate earnings saw the index up 6.0% last week. More generally, the week saw the majority of regional equity indices move higher on the back of further optimism that with businesses resuming operations and continued management of the covid-19 spread, the global economic juggernaut can churn back into action.

This was despite the US unemployment rate hitting 14.7%. The number of US workers made unemployed since the middle of March has now exceeded 33 million people, that is more than the population of Belgium and the Netherlands combined. Nonetheless, global equities finished the week up 4.0%.

THIS WEEK IN 30 SECONDS...

Optimism continues to stifle uncertainty from raising its head within markets as investors look to reinforce this outlook with production and distribution lines ramping back up. However, the week will see investors also carefully minded to reports on any relapses in the control of covid-19, like South Korea and Germany, and its knock-on impact on economic confidence.

Quarterly earnings announcements continue this week with over 5,000 companies providing updates including Tencent and Allianz. Elsewhere, US retail sales numbers are due for release on Friday, which are likely to paint a downbeat picture. Eurozone industrial production numbers for March are released on Wednesday, with Eurozone GDP numbers for Q1 2020 released on Friday.

FINANCIAL ALCHEMY SEES WEEKS TURNED INTO YEARS

Since the 23rd March equity bulls have rejoiced as global equities have delivered a return of +27.4%. The recovery in equity markets is a mere seven weeks old yet the market’s revival has delivered a magnitude of return greater than 2015, 2016 and 2017 combined.