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Weekly Focus - 29 June 2020

Weekly Focus                             29 June 2020

The IMF forecasts a strong recovery next year
 

 

Last week the performance of risk assets was negatively impacted by an unexpected increase in the number of coronavirus cases in the US. Just a week ago investors were of the view that further outbreaks of the virus would be addressed with localised lockdowns and hence broader consumption and aggregate demand would not be significantly impacted by further outbreaks.

 

But it now seems that spending patterns depend much more on health concerns. Corporations like Disney announced they would delay reopening in some states while Apple announced temporary store closures. The yield on the US 10 year treasuries fell to 0.64%, its lowest level since mid-May. During the week, the IMF revised its projections of global growth lower for this year to minus 4.9%, the largest contraction since 1949. But it also estimated that global growth for next year would be an impressive 5.4%, the fastest rate since 1964. 

 

Other positive news were from IHS Markit which indicated that the manufacturing and services segments of PMIs were rebounding. New home sales data also beat analysts’ expectations and durable goods orders reported by the Commerce dept. for May was higher than estimated. President Trump told a reporter that a generous fiscal package was on its way and his advisor Larry Kudlow revealed the package would include direct payments to individuals. Monetary policy continues to be the first responder though and we should see that reiterated in the FED meeting minutes to be released on Wednesday. 

 

Improving macroeconomic and earnings data should benefit risk assets in H2 2020 in spite of lingering volatility. Moreover long term investors should continue to add risk to portfolios especially equities in the US even if it might result in short term fluctuations to portfolios.  
 

   

 

 

Value

1 Week

YTD

Equity Indices

 

 

 

S&P500

3,009

-2.86%

-6.86%

FTSE JSE All Share

50,526

0.54%

-11.58%

Stoxx50

3,204

-1.99%

-14.44%

FTSE100

6,164

-2.05%

-18.28%

DAX

12,089

-1.96%

-8.75%

CAC40

4,910

-1.40%

-17.87%

SMI Index

10,042

-2.19%

-5.42%

FTSE MIB

19,124

-2.52%

-18.64%

Shanghai Comp

2,980

0.40%

-2.31%

BSE Sensex

35,171

1.27%

-14.74%

Nikkei

22,512

0.15%

-4.84%

Major currencies

 

 

 

USDZAR

17.24

-0.53%

23.12%

EURUSD

1.12

0.37%

0.05%

GBPUSD

1.23

-0.19%

-6.98%

USDCHF

0.95

-0.45%

-2.06%

EURCHF

1.06

-0.08%

-2.00%

GBPZAR

21.26

-0.70%

14.46%

EURGBP

0.91

0.55%

7.62%

USDAUD

1.46

-0.43%

2.30%

Dollar Index

97

-0.12%

1.46%

 Commodities 

 

 

 

Brent

40.93

-2.99%

-37.98%

WTI Oil

38.20

-3.90%

-37.44%

Copper

2.66

1.69%

-5.67%

Platinum

819.30

-0.90%

-15.70%

Sugar

11.62

-3.57%

-13.41%

Corn

316.38

-4.60%

-18.41%

Gold

1,784.80

1.81%

16.27%

 Sovereign Yields

 

 

 

US10Y

0.64

-7.74%

-66.65%

UK10Y - price

137.55

-0.15%

4.70%

Germany10Y

-0.48

16.14%

157.75%

 Deposit rates with selected banks

 

The MCB Ltd, 6M USD 1.20%

 

 

 

 

Contact us: Durban +27 (0) 31 566 3365 | CPT +27 ( 0 ) 21 851 0920 | JHB +27 ( 0 ) 11 017 7230 | Email: enquiries@pwm-wealth.com

Disclaimer: The research report has been prepared for information purposes and does not constitute an offer. While reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and the company accepts no liability whatsoever for any direct or consequential loss, including without limitation any loss of profits, arising from reliance on this report
 


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