Markets grapple with lockdown balancing act – Zurich Life Weekly Investment News

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Equities saw choppy trading last week before finishing the week lower as a number of key officials tempered optimism. Dr. Anthony Fauci struck a cautionary tone when commentating on the risks of reopening too quickly, whilst Fed Chair Powell remarked that the path for a U.S. economic recovery may extend to the end of 2021.

U.S.-China tensions were also back in the spotlight as diplomats from both sides sparred on the pandemic, trade deals, and press freedom in Hong Kong. The U.S. also moved to tighten restrictions around U.S. companies supplying Huawei. U.S. chip makers equities such as Qualcomm saw price falls as a result.

Economic data continued to see large declines, as measures of U.S. industrial and retail activity collapsed in April, with both seeing the largest monthly drops since records began. Inflation figures also continued the negative data trend as the U.S. Consumer Price Index fell 0.8% as the fall in demand outstripped the fall in the supply. Lower oil prices throughout April would also have contributed to the drop, although there has been a strong rebound in prices so far in May namely on the back of increased collaboration between Saudi Arabia and Russia. Democrats in Congress led approval for the latest stimulus package but it remains to be seen if it has sufficient bipartisan support.

Development of a COVID-19 vaccine continues as a number of new initiatives and funding were announced from a number of countries. However, even the most promising of proposals remain in the early stages. CLICK HERE

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