{"id":2019,"date":"2020-07-02T11:09:46","date_gmt":"2020-07-02T11:09:46","guid":{"rendered":"http:\/\/www.wealthatwork.co.uk\/jpm\/?p=2019"},"modified":"2020-11-18T09:47:55","modified_gmt":"2020-11-18T09:47:55","slug":"market-update-2nd-july-2020","status":"publish","type":"post","link":"https:\/\/www2.wealthatwork.co.uk\/jpm\/2020\/07\/02\/market-update-2nd-july-2020\/","title":{"rendered":"Market Update \u2013 2nd July 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\/Lgs5xbhySxw?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>The tug of war between an economic recovery versus a rise in coronavirus cases and geopolitical tensions continues to yo-yo equity markets.<\/p>\n<p>However, this morning the bulls are in charge as equity markets are trading higher, with the FTSE-100, as we write, up around 60 points, or 1%, at 6,220, following positive economic data and news of a possible coronavirus vaccine.<\/p>\n<p>In the US yesterday afternoon, the initial headline ADP Employment Change data appeared disappointing as just 2.37m jobs were added in June \u2013 well short of economists\u2019 consensus estimates of 2.9m.\u00a0 However, May\u2019s data saw a massive revision:\u00a0 having previously reported that 2.76m jobs were lost, it was revised to show 3.06m jobs were added \u2013 an incredible 5.82m difference!<\/p>\n<p>Consequently, May and June data taken together shows that the US employment market is improving rapidly as lockdown restrictions start to be eased.<\/p>\n<p>Additionally, this bodes well for this afternoon\u2019s important and market sensitive, non-farm payroll data for June \u2013 and if we get a blow-out number (which we believe we will, given the number of states that have reopened, which would boost leisure and hospitality jobs), it will give equity market sentiment a nice boost going into the weekend (US equity markets are closed tomorrow, Friday 3 July 2020, for Independence Day).<\/p>\n<p>US ISM manufacturing also unsurprisingly recovered nicely from 43.1 to 52.6 \u2013 we have mentioned a number of Fed district activity indices over the past couple of weeks (such as the Empire State and the Philadelphia Fed surveys), which have come in strongly, and gave us a big hint that this reading would be strong.\u00a0 50 is the line separating expansion and contraction, so not only is a reading of 52.6 very positive in itself, but this is the best reading since April 2019!<\/p>\n<p>This all indicates that the US (the largest economy in the world) is on track for the V-shaped economic recovery that we have been talking about in these daily commentaries for some time.<\/p>\n<p>Admittedly, uncertainties have increased with the spread of the coronavirus in a few states, however we believe it is wrong to assume data will quickly turn negative, given that we are still in the early stages of the recovery, coupled with the fact that a coronavirus vaccine probably isn\u2019t too far away given the staggering number of drug companies around the world working on a vaccine.\u00a0 And yesterday afternoon\u2019s announcement that Pfizer\u2019s phase 1 vaccine trial produced a strong immune response is very positive.<\/p>\n<p>Elsewhere the minutes of the last Fed monetary policy meeting, held on 10 June 2020, didn\u2019t shed much more light on their thoughts other than the Fed is currently conducting a review which may mean a symmetric 2% inflation target \u2013 thus allowing the Fed to run the economy (and inflation) a little hotter in the future, as the current 2% target has been massively undershot for most of the period since the 2008\/9 global financial crisis (as the focus on not breaching the 2% target can, and has, resulted in the premature withdrawal of monetary stimulus).<\/p>\n<p>It is a very busy afternoon and evening for us given the volume of economic data due out, including, as we mentioned earlier the highly important non-farm payrolls, plus the US unemployment rate; average earnings; participation rate; the weekly initial and continuing jobless claims; trade balance; and durable goods orders \u2013 which we will update you about in tomorrow\u2019s commentary.<\/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>The tug of war between an economic recovery versus a rise in coronavirus cases and geopolitical tensions continues to yo-yo equity markets. However, this morning the [&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\/2019"}],"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=2019"}],"version-history":[{"count":2,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/2019\/revisions"}],"predecessor-version":[{"id":2159,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/2019\/revisions\/2159"}],"wp:attachment":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media?parent=2019"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/categories?post=2019"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/tags?post=2019"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}