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MARKET MONITOR 
|
June 26

MARKET MONITOR

Chart of the Week


COVID-19

Though headlines have been increasingly dominated by a resurgence in COVID-19 cases, we continue to see improvements in back-to-business segments such as department store spending. Stay-at-home categories have started to decelerate, but may see tailwinds if states renew their lockdowns and risk-averse consumers choose to remain indoors.

Source: Goldman Sachs Global Investment Research.

Market Summary


GLOBAL EQUITIES

Anticipated stimulus measures pushed the S&P 500 up briefly last week, but steep falls on Wednesday and Friday led stocks to end the week down 2.86%. These pullbacks occurred on the back of rising COVID-19 cases and renewed lockdowns in some states, and concern around trade restrictions with both China and Europe. In Europe, the Eurostoxx 600 ended the week down 1.90% despite improved economic data and a number of ECB stimulus actions. Read More

COMMODITIES

Oil prices came under pressure last week as coronavirus fears intensified and US oil inventories showed a build up. WTI and Brent ended the week at $38.49 and $41.02 per barrel, respectively. Gold touched a seven-year high midweek, as investors looked for an inflation hedge while monetary stimulus keeps real rates low. Soybean prices rallied, as China increased its purchases of US soybeans, where demand was previously muted. Read More

FIXED INCOME

US Treasury yields declined last week amid rising coronavirus cases and concerns over a second wave. The 10-year yields dropped to 0.64% as investors looked for safety after daily total new infections in the US hit its highest level and jobless claims came in higher than expected. UK Gilt yields similarly saw a decline, with 5-year yields dropping to a record low this week. Corporate debt market spreads widened, with US investment grade and high yield spreads reaching 153 basis points (bps) and 618 bps, respectively, following a selloff as investors tried to pare back exposure to coronavirus-impacted industries. Read More

FX

The Euro showed strong performance last week, rising 0.37% against the US dollar as the ECB reaffirmed its dovish stance, giving hope for future stimulus. The US Dollar Index maintained steady footing despite virus concerns, slipping 0.07% last week. Read More

Economic Summary


MANUFACTURING

In the Euro area, June’s composite PMI rebounded by 15.6 points to 47.5, consistent with the easing of lockdown measures and improvements in high-frequency activity data. However, the indicator remains below 50, indicating that the economy is not yet back in expansionary territory. Read More

INFLATION

Core PCE, the Fed’s preferred inflation measure, rose +0.1% in May or 1.0% year-over-year. May’s consumer spending rose a record +8.2%, reflecting the reopening of many businesses. Personal income fell -4.2% and is at risk of further declines absent further stimulus measures from Congress. Read More

POLICY

June ECB meeting minutes indicated that there was “broad agreement” that its monetary policy’s “negative side effects had so far been clearly outweighed by the positive effects of asset purchases on the economy in the pursuit of price stability.” In addition, the ECB will begin offering euro liquidity to non-Euro area central banks in response to the COVID-19 crisis. Read More

SENTIMENT

The German Ifo business climate index edged higher, above market consensus, due to an improvement in business expectations. However, high dispersion indicated that the outlook remains uncertain. Read More

Style Performance


US Equity Size & Style Returns

MONTH-TO-DATE

Large
-3.64%
-0.80%
1.33%
Medium
-2.28%
-1.25%
-0.01%
Small
-2.40%
-1.00%
0.05%
Value
Core
Growth

YEAR-TO-DATE

Large
-18.77%
-5.68%
6.63%
Medium
-20.85%
-11.85%
1.76%
Small
-27.44%
-16.79%
-6.60%
Value
Core
Growth

MSCI World Size & Style Returns

MONTH-TO-DATE

Large
-1.56%
0.56%
2.56%
Medium
-0.50%
0.39%
1.35%
Small
-0.52%
0.21%
0.93%
Value
Core
Growth

YEAR-TO-DATE

Large
-18.85%
-7.00%
5.50%
Medium
-23.16%
-11.23%
-1.33%
Small
-24.39%
-14.87%
-5.38%
Value
Core
Growth

US Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
0.03%
0.06%
0.84%
Corporate
0.92%
1.49%
2.46%
High Yield
1.71%
1.16%
4.09%
Short
Intermed.
Long

YEAR-TO-DATE

Government
4.19%
5.79%
22.07%
Corporate
3.15%
4.09%
6.27%
High Yield
-4.96%
-3.99%
4.92%
Short
Intermed.
Long

European Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
0.21%
0.78%
1.84%
Corporate
0.62%
1.59%
2.53%
High Yield
2.00%
??????
??????
Short
Intermed.
Long

YEAR-TO-DATE

Government
-0.14%
1.09%
4.76%
Corporate
-0.81%
-1.36%
-0.22%
High Yield
-5.20%
??????
??????
Short
Intermed.
Long

Source: Bloomberg, Barclays and GSAM (as of 06/26/20)

VIEW LESS DISCLOSURE

Key Economic Releases


Monday, Jun 29

Japan Unemployment (Cons: 2.8%, Prior: 2.6%)

Tuesday, Jun 30

China PMI Manuf. (Cons: 50.7, Prior: 50.7)

Wednesday, Jul 01

ISM Manuf. (Cons: 49.5, Prior: 43.1)

Thursday, Jul 02

US Unemployment (Cons: 12.4%, Prior: 13.3%)
US Jobless Claims (Cons: 1336k, Prior: 1480k)

Friday, Jul 03

Euro area Unempl. (Cons: 7.7%, Prior: 7.3%)

VIEW LESS DISCLOSURE

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