It has been dubbed the ‘everything rally’, as equities, bonds and commodities have all risen sharply from the lows of March. But within these asset classes there are some outstanding outperformers and some notable laggards. Our discussion today aims to discover whether it’s the winners or the losers that might have lost touch with the fundamentals.
US markets took heart from a faster improvement in unemployment data, while China’s big tech stocks were hit by President Trump’s ban on TikTok and WeChat. Meanwhile, momentum continues to gather in the ESG space, with total assets breaching $1 trillion globally in the second quarter.
Equity and bond markets focused on the historically weak US GDP figure for Q2, which confirmed a US recession. China was boosted by solid PMI data, despite localised surges in Covid-19 infections. All eyes this week on US unemployment data, due on Friday, for any indications of a growth rebound.
Last week, US markets were relatively flat despite the ramping up of the tensions with China. In Europe, EU leaders reached an agreement on the Covid-19 recovery package. This week, the main focus will be on the macroeconomic environment with GDP numbers released across the US and Europe.
US markets were positive last week driven by encouraging news on vaccine trials which could lead to prolonged immunity. In Europe market’s progressed despite uncertainty around the €750 billion stimulus package in Europe to help economies recover from the Covid-19 crisis. Elsewhere, US companies earnings remain a focus with notable companies like Microsoft, Tesla and Amazon reporting this week.