While there is still a long path to recovery, global June flash PMIs confirmed we have passed the trough as contraction eased. The U.S. Employment report will be released next week, and the pressure is on for Britain and Japan to come up with a deal.
Sharp improvements in global manufacturing and service sector activity was balanced with evidence of a still weak labor market as the virus notably strengthened in the U.S. Warnings from the Federal Reserve that some large U.S. banks may push minimum capital levels in worst-case pandemic scenarios underscored virus economic headwinds, while reports of increased trade tensions added to risk asset pressures.
The first half of 2020 has been unexpected, to say the very least. Our outlook for the year quickly became obsolete with the rapid spread of COVID-19 and accompanying lockdowns across the globe, which have stymied economic activity and caused an unprecedented destruction of demand.
A search for yield amid declining interest rates has presented real challenges for fixed income investors for some time now. However, the economic damage wrought by the coronavirus crisis also has moved credit quality into the spotlight.
Advisors exhibited behaviors consistent with longer-term trends across the board. Allocation to cash remained unchanged this week at 4.09%.
Stock prices have roared back strongly through the second quarter, as investors grew increasingly optimistic over prospects for economic reopening and the unprecedented monetary policy support that provided a strong tailwind for equities.
Sustainability and ESG (Environmental, Social, and Governance) are the new buzz words in investing but – despite their popularity – they are often poorly understood.
The COVID-19 shock is accelerating structural trends in inequality, globalization, macro policy and sustainability. This is fundamentally reshaping the investment landscape and will be key to investor outcomes.