{"id":2035,"date":"2020-07-16T11:14:30","date_gmt":"2020-07-16T11:14:30","guid":{"rendered":"http:\/\/www.wealthatwork.co.uk\/jpm\/?p=2035"},"modified":"2020-11-18T09:38:23","modified_gmt":"2020-11-18T09:38:23","slug":"market-update-16th-july-2020","status":"publish","type":"post","link":"https:\/\/www2.wealthatwork.co.uk\/jpm\/2020\/07\/16\/market-update-16th-july-2020\/","title":{"rendered":"Market Update \u2013 16th 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\/WuW0dzdRUjA?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 positive sentiment in global equity markets continued to build yesterday after the Philadelphia Fed President, Patrick Harker, said the Fed\u2019s 2% inflation target should be symmetric and therefore the US central bank should hold off on raising US interest rates until inflation is above its target (i.e. allow inflation to overshoot 2% before the Fed starts to take action).\u00a0 Given US CPI inflation is just 0.6%, this confirms what we have long been saying in these commentaries:\u00a0 US monetary policy is likely to remain very loose for the foreseeable future.<\/p>\n<p>Data wise, none of yesterday\u2019s important releases (the Empire State Manufacturing Survey; US industrial output; and the Fed\u2019s Beige Book), had any hint of the US economy losing momentum \u2013 which suggests, as we wrote in yesterday\u2019s commentary (<a href=\"https:\/\/www2.wealthatwork.co.uk\/mywealth\/2020\/07\/15\/market-update-15th-july-2020\/\">please see here<\/a>), that JPMorgan\u2019s CEO, Jamie Dimon, was being too cautious in his economic outlook and as a result, potentially \u2018kitchen sinking\u2019 their bad-debt provisions.<\/p>\n<p>In fact, US industrial production in June had its largest monthly gain since December 1959 (when it rose 6.18% following the end of a 116-day US steel industry strike):\u00a0 after climbing 1.4% in May, total output at factories, mines and utilities increased by a further 5.4% in June \u2013 which indicates that US manufacturing is bouncing back strongly as the economy starts to reopen following the coronavirus shutdowns.<\/p>\n<p>The Empire State survey improved for the third month in a row, from -0.2 to 17.2.\u00a0 Zero is the line dividing expansion and contraction, and so a reading of 17.2 also indicates that the US economy is bouncing back strongly as the economy reopens, while the Fed\u2019s Beige Book also reported signs of improving demand growth due to the economic reopenings.<\/p>\n<p>This morning\u2019s Chinese Q2 GDP data also confirmed the economy is well and truly on the mend as not only did GDP turn positive, it smashed economist estimates of a 2.4% expansion, by growing by a whopping 3.2%, while industrial production rose 4.8% in June.\u00a0 The only fly in the ointment was retail sales, which slipped 1.8% in June \u2013 although a deeper investigation shows this was predominately due to car sales, as most other categories showed strong sales growth.<\/p>\n<p>However, UK and European equity markets have opened slightly lower this morning ahead of another large dump of economic data later today.\u00a0 First up will be the ECB monetary policy meeting (although we aren\u2019t expecting anything interesting to come from it), followed by US retail sales and the weekly US jobless claims data \u2013 and any further signs that the economy is recovering should help push equity markets higher.<\/p>\n<p>The FTSE-100 is currently down just over 40 points, or 0.70%.<\/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 positive sentiment in global equity markets continued to build yesterday after the Philadelphia Fed President, Patrick Harker, said the Fed\u2019s 2% inflation target should be [&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\/2035"}],"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=2035"}],"version-history":[{"count":2,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/2035\/revisions"}],"predecessor-version":[{"id":2151,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/2035\/revisions\/2151"}],"wp:attachment":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media?parent=2035"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/categories?post=2035"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/tags?post=2035"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}