Global equities were mixed last week, with technology stocks once again weighing on the global index. Value stocks and small caps outperformed in the U.S., as some investors continue to rotate out of the market leaders of recent months. The week started brightly on positive vaccine news set an optimistic tone, however worries about the Fed’s ability to continue to support equity markets grew as the week progressed, even as the Fed signalled that it is likely to keep interest rates on hold through to 2023.
That news was welcomed as the latest data confirmed that the G20 GDP for Q2 came in at -6.9% for the quarter – the worst on record. China was the only major global economy to grow in Q2, and those gains have been extended in recent weeks. Flash September PMIs across the globe on Wednesday will give a further indication of how Q3 is progressing. Data in general disappointed last week, as U.S. retail sales and industrial production came in below expectations. Whilst some details under the surface were more positive, the initial data rebound from the depths of the recession is starting to level out.
On the virus front, the WHO warned over the weekend that Europe was facing a ‘very serious’ situation as the number of weekly new cases in Europe hit over 300,000 for the first time. Whilst a return to wider restrictions has so far been resisted, there are discussions regarding the reintroduction of a lockdown in a number of major European cities, similar to what we are now seeing ourselves here in Dublin. CLCIK HERE