{"id":1950,"date":"2020-04-30T10:15:40","date_gmt":"2020-04-30T10:15:40","guid":{"rendered":"http:\/\/www.wealthatwork.co.uk\/jpm\/?p=1950"},"modified":"2020-11-18T10:48:11","modified_gmt":"2020-11-18T10:48:11","slug":"market-update-30th-april-2020","status":"publish","type":"post","link":"https:\/\/www2.wealthatwork.co.uk\/jpm\/2020\/04\/30\/market-update-30th-april-2020\/","title":{"rendered":"Market Update \u2013 30th April 2020"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><div class=\"vc_row wpb_row vc_row-fluid\">\n<div class=\"wpb_column vc_column_container vc_col-sm-12\">\n<div class=\"vc_column-inner \">\n<div class=\"wpb_wrapper\">\n<div class=\"wpb_raw_code wpb_content_element wpb_raw_html\">\n<div class=\"wpb_wrapper\"><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/b1nMxph9eAQ?rel=0&amp;wmode=transparent\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\" data-mce-fragment=\"1\"><\/iframe><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"vc_row wpb_row vc_row-fluid\">\n<div class=\"wpb_column vc_column_container vc_col-sm-12\">\n<div class=\"vc_column-inner \">\n<div class=\"wpb_wrapper\">\n<div class=\"wpb_text_column wpb_content_element \">\n<div class=\"wpb_wrapper\">\n<p>Global equity markets brushed aside US Q1 GDP data and the Fed\u2019s downbeat economic assessment and instead focused on a potential new drug which helped coronavirus patients recover faster.\u00a0 As a result, the Dow Jones closed 532 points higher, or 2.21%, while the broader S&amp;P 500 index rose 2.66%.\u00a0 In the UK, the FTSE-100 closed up over 150 points or 2.6% yesterday \u2013 although this morning it is, as we write, trading sideways.<\/p>\n<p>While we have long argued that the coronavirus outbreak is likely to be a transient issue, we would caution against this week\u2019s euphoria as it feels like equity markets are being slightly too complacent that the potential new drug, Remdesivir, can quickly stop the coronavirus spread.\u00a0 Although we still believe that we will see a V-shaped recovery and we remain positive on equity markets, we do need to be mindful that market volatility will remain elevated in the short-term.<\/p>\n<p>US GDP data showed that the economy contracted by 4.8% in the first quarter, the biggest slide since 2008 and the first contraction since 2014, thanks predominantly due to a slump in consumer spending as the coronavirus spread closed shops and restaurants.<\/p>\n<p>Given that the US economy was running as normal for the vast majority of the 3 months, this decline gives us a good taste of what we can expect during the second quarter, given the lockdown restrictions.\u00a0 In fact given this reading, we wouldn\u2019t be surprised if Q2 GDP contracts by 30 or even 40% on an annualised basis given the rapid rise in unemployment we have seen during April \u2013 such a large GDP decline would have been unimaginable just a couple of months ago, but is now simply accepted by equity markets!<\/p>\n<p>The Fed Chair, Jay Powell, was not particularly optimistic on the economic outlook by talking about the unknown duration of the coronavirus lockdowns and the potential difficulties that the unemployed will have in finding new jobs.\u00a0 However, on a positive note, he did say that the central bank would provide more stimulus if needed.<\/p>\n<p>Overnight, Chinese PMI data for April came in with readings over 50 (50.8 for manufacturing and 53.2 for non-manufacturing) \u2013 50 is the line separating expansion and contraction, so a reading above 50 signals the Chinese economy is expanding.<\/p>\n<p>Looking ahead to today, we have the weekly US initial jobless claims (hopefully the trend will continue to slow after seeing over 26m Americans lose their jobs in the previous five weekly readings); Eurozone Q1 GDP; and ECB policymakers meet (and after this morning\u2019s French and Spanish Q1 GDP data, which showed economic contraction of 5.8% and 5.2% respectively, the pressure is on for more stimulus).<\/p>\n<p><strong>Investment Management Team<\/strong><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n  <\/div> ","protected":false},"excerpt":{"rendered":"<p>Global equity markets brushed aside US Q1 GDP data and the Fed\u2019s downbeat economic assessment and instead focused on a potential new drug which helped coronavirus [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"_links":{"self":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/1950"}],"collection":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/comments?post=1950"}],"version-history":[{"count":2,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/1950\/revisions"}],"predecessor-version":[{"id":2193,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/1950\/revisions\/2193"}],"wp:attachment":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media?parent=1950"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/categories?post=1950"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/tags?post=1950"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}