Please see below for this week’s market update received from Blackfinch Asset Management earlier today:
In the ever-changing world that we live in, we recognise the importance
of regular and current communication. This weekly news update from our
MPS Portfolio Managers provides you with a short summary of events
around the world which we hope you will find useful.
Issue 5 | 24th August, 2020
- The IHS Markit UK Household Finance Index fell to 40.8 in August from 41.5 in July.
- UK retail sales increased by 3.6% in July and are now 3% above the pre-pandemic levels seen in February. Online sales numbers fell by 7.0%, but remain 50.4% higher than in February.
- The IHS Markit Composite Purchasing Managers’ Index (PMI) for August rose to 60.3 from 57.0 in July, the fastest rate of business activity expansion since October 2013.
- UK retail footfall showed a weekly increase of 0.8%, following a 3.8% increase the week before. Market research group Springboard suggest the slowdown in growth could be attributable to the hot weather.
- Market research group Kantar released data showing that the grocery market grew by 14.4% in the 12 weeks to the 9th August, with households averaging 14 shopping trips per month.
- Inflation, measured by the Consumer Price Index (CPI), rose unexpectedly to 1.1% in July, driven by an increase in culture and recreation costs, analysts had predicted a reading of 0.7%.
- A Reuters survey of economists suggests that the UK economy will take at least two years to recover from the impact of COVID-19.
- US/China trade talks are cancelled, President Trump signs an executive order forcing TikTok developer ByteDance to sell off its US operations within 90 days and announces further tightening of restrictions on Huawei.
- The S&P 500 reached record levels, stopping just short of closing above the 3,400 level.
- Apple becomes the first company to reach a market capitalisation of US$2trn.
- News on the next tranche of stimulus from the US government fails to materialise for another week.
- Minutes from the Federal Reserve offer little encouragement, stating that the pandemic could have a ‘considerable’ impact on the US economic outlook for the medium term. The Federal Reserve also offer no further guidance on interest rates, reiterating that they will remain low for ‘a very long time’.
- First-time unemployment claims rise by 135,000, counteracting the previous week’s fall.
- The Chinese Central Bank added 700bn Yuan (c.£76bn) to their medium-term lending facility for commercial lenders in order to help liquidity, helping to boost sentiment.
- Japanese Gross Domestic Product (GDP) shrinks at 7.8% on a seasonally-adjusted quarterly basis, the third consecutive quarter of negative growth.
These articles are useful for breaking down market input into sectors. This facilitates an all-round view of the markets from the experts in a quick and efficient format.
Please use these blogs to keep your own view of the markets up to date from a variety of different sources.
Keep safe and well.