Stocks saw their worst week for several months as fears over a resurgence in virus cases and comments from Jay Powell shook markets. The week had started brightly with a number of key metrics returning to positive territory for the year. However, fears came to a head on Thursday as markets ended the day down more than 5%, as value orientated and small cap stocks gave up much of their recent gains. Chair Powell struck a cautionary tone in comments last Wednesday in relation to the potential strength of any economic recovery. He also stated that the Fed are ‘not even thinking about thinking about raising rates’. These comments coincided with news that Texas had reported its highest one-day total of new cases since the pandemic began and an outbreak of nearly 100 coronavirus cases in Beijing, reported over the weekend, raised fears of a resurgence of the pandemic in China. Commentators continue to speculate that a second wave could curb economic activity even without official action from governments globally. Economic news flow was light last week, but we did see U.S. consumer prices fall for a third straight month.
Finally, as of mid- June, global cases were over 7M, while over 420,000 fatalities have been recorded, however plans to reopen continue. The EU is due to ease its ban on inbound travel before 1st July and Germany is aiming to lift the majority of existing border restrictions later on this evening. CLICK HERE