{"id":1992,"date":"2020-06-10T11:03:22","date_gmt":"2020-06-10T11:03:22","guid":{"rendered":"http:\/\/www.wealthatwork.co.uk\/jpm\/?p=1992"},"modified":"2020-11-18T09:57:21","modified_gmt":"2020-11-18T09:57:21","slug":"market-update-10th-june-2020","status":"publish","type":"post","link":"https:\/\/www2.wealthatwork.co.uk\/jpm\/2020\/06\/10\/market-update-10th-june-2020\/","title":{"rendered":"Market Update \u2013 10th June 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\/3LPnZNDHfFU?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 equities continue to weaken after the recent strong rally.\u00a0 Having ended yesterday (Tuesday 9 June 2020) down 136.87 points, or 2.12%, the FTSE-100 is down a further 30 points, or 0.5%, this morning.\u00a0 On Wall Street, the Dow Jones closed down 300 points (1.09%), while the S&amp;P 500 index fell 0.78%.<\/p>\n<p>As we said yesterday, there is no need to panic, as the recent market rally hasn\u2019t run its course:\u00a0 this is simply profit-taking, similar to wiping the frothy head from a pint of lager, ahead of the Fed\u2019s monetary policy meeting announcement later today (7pm UK), as the market is concerned that the Fed will start unwinding its stimulus.<\/p>\n<p>We believe that the recent equity market strength is fully justified because, as we have previously said, the coronavirus outbreak is a transient issue \u2013 and as a result, while we will suffer a sharp, deep and painful recession, it will also be a very short recession with a sharp acceleration on the other side of this horrible coronavirus outbreak, thanks to the extraordinary government and central bank stimulus.<\/p>\n<p>Additionally, why would the Fed start to unwind its stimulus following one (albeit stunning) US employment report?\u00a0 \u00a0As we stated yesterday, although we are starting to see economic green shoots, they are still very tender, which we believe makes it far too early to be talking about unwinding the current stimulus \u2013 especially as US unemployment is still in excess of 13% and inflation is well below the central bank\u2019s 2% target.<\/p>\n<p>Furthermore, we believe the market is ignoring the threat of deflation (which can make consumers delay purchases, resulting in slower economic growth).\u00a0 Consequently, we believe this will ensure the Fed, along with all central banks globally, will remain dovish (i.e. accommodating \u2013 with loose monetary policies) for the foreseeable future.<\/p>\n<p>To us this was evident in today\u2019s Chinese PPI (producer prices) data, which widened to a decline of 3.7% in May from 3.1% in April \u2013 and China is the largest trading partner for the majority of the world\u2019s major economies, which means it is currently exporting deflation (i.e. lower prices) around the world.<\/p>\n<p>As a result, we believe that during the Fed\u2019s press conference, Jay Powell, the Fed Chair, will aim to reassure the market that their monetary policy will remain dovish, in order to ensure businesses and consumers remain confident in the economic recovery \u2013 consequently, please read or watch tomorrow\u2019s market update for our thoughts and views.<\/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 equities continue to weaken after the recent strong rally.\u00a0 Having ended yesterday (Tuesday 9 June 2020) down 136.87 points, or 2.12%, the FTSE-100 is down [&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\/1992"}],"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=1992"}],"version-history":[{"count":2,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/1992\/revisions"}],"predecessor-version":[{"id":2171,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/1992\/revisions\/2171"}],"wp:attachment":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media?parent=1992"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/categories?post=1992"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/tags?post=1992"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}