Gerald Fitzgerald’s Market Review October 12th
12 October 2020
LAST WEEK IN 30 SECONDS...
Optimism abounded last week that a US stimulus may still be available despite the political turbulence. As cases of Covid-19 continue to rise, the fear of curtailment to business operations from further lockdowns did little to dissuade investor risk-on sentiment as M&A activity picked up and major stock indices rose higher.
Global equities finished the week up 2.8% in euro terms and whilst dampened somewhat by a stronger euro over the period, have left headline equities within touching distance of returning to par for the year-to-date.
THIS WEEK IN 30 SECONDS...
The week ahead sees corporate disclosures dominate headlines as over 600 companies provide quarterly updates on earnings. Banks and consumer staples lead the earnings announcements with JPMorgan Chase, Proctor & Gamble and Goldman Sachs all due to provide earnings guidance to markets.
Elsewhere, the US presidential election continues to simmer in the background whilst trade discussions between the UK and European Commission trudge along like a lorry taking on an hors catégorie ascent. From an economic perspective, US inflation updates are due for release on Tuesday with US retail sales updates on Friday. Tuesday also sees the release of Eurozone economic sentiment, whilst Eurozone industrial production updates are released on Wednesday.
ENERGY NEEDS A RECHARGE
Notwithstanding this year’s weak energy demand compounded by inflated supply, the view that both disruption through innovation coupled with stricter regulation will negatively affect the energy sector in years to come has seen the sector underperforming headline equities. Had you invested $100 in headline equities 10 years ago, it would now be worth $261 compared to the energy sector being valued at a mere $70.