{"id":2089,"date":"2020-09-16T11:29:49","date_gmt":"2020-09-16T11:29:49","guid":{"rendered":"http:\/\/www.wealthatwork.co.uk\/jpm\/?p=2089"},"modified":"2020-11-18T09:30:25","modified_gmt":"2020-11-18T09:30:25","slug":"market-update-16th-september-2020","status":"publish","type":"post","link":"https:\/\/www2.wealthatwork.co.uk\/jpm\/2020\/09\/16\/market-update-16th-september-2020\/","title":{"rendered":"Market Update \u2013 16th September 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\/gWGcYLt2HcI?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 have got off to a reasonable start this week, helped by news that AstraZeneca had resumed UK clinical trials of its coronavirus vaccine, while the US pharmaceutical company, Pfizer, said that their coronavirus vaccine could be viable by the end of October and distributed within the US by the year-end.<\/p>\n<p>Also helping equity market confidence has been economic data releases from China, which have come in stronger than economist expected.\u00a0 The highlights to us include industrial production (which grew by 5.6% in August \u2013 up from 4.8% in July and estimates of 5.1%) and retail sales (which grew by 0.5% in August \u2013 its first positive reading since the coronavirus outbreak).\u00a0 UK employment data (which showed unemployment increased from 3.9% to 4.1%), unfortunately continues to be fairly meaningless, given it is being distorted by the government\u2019s Job Retention (furlough) scheme.<\/p>\n<p>US equities have had a particularly strong few days following a brutal two weeks of falls \u2013which supports our previous statement that this was simply profit-taking in a handful of heavy-weighted technology stocks that has now, by and large, run its course, rather than a more sinister erosion of confidence.\u00a0 For example, Tesla, which was at the epicentre of last week\u2019s sell-off, closed over 12.5% higher on Monday.<\/p>\n<p>Japanese equities have also been helped by confirmation that Yoshihide Suga, will become Japan\u2019s next Prime Minster, after Shinzo Abe stepped down due to poor health.\u00a0 Consequently, we expect a relatively seamless transition as he has already pledged to continue the current ultra-loose monetary policy.<\/p>\n<p>Although we have had a relatively quiet economic calendar so far this week, this is a big week for the key central banks, as we have policy meetings in the US, UK and Japan.\u00a0 The Fed\u2019s monetary policy announcement is first up (Wednesday 16 September 2020 at 7pm UK time).\u00a0 This is then followed by the BoJ and BoE on Thursday (17 September 2020).<\/p>\n<p>Despite the fact we aren\u2019t expecting any of the central banks to do anything to risk the current positive market sentiment, our ears will be pricked up ready to listen to their comments.<\/p>\n<p>For example, while we don\u2019t believe the Fed is likely to want to alter monetary policy ahead of the US Presidential election (which is now less than 7 weeks away), we wouldn\u2019t be surprised if Jay Powell, the Fed Chair, warns us that the US economic recovery is likely to slow down if Congress don\u2019t get on and agree a new US fiscal stimulus package to help those American workers that have been hard-hit by the coronavirus outbreak and associated lockdowns.<\/p>\n<p>Likewise, the BoJ may simply want to talk a good story to help support Yoshihide Suga.<\/p>\n<p>The BoE\u2019s decision is slightly more complicated given the increasingly uncertain backdrop, as a result of renewed coronavirus restrictions, the ending of the government\u2019s Job Retention (furlough) scheme and of course the souring Brexit negotiations.\u00a0 Although the BoE has so far resisted the temptation of taking interest rates below zero, a complete breakdown in Brexit negotiations will almost certainly result in negative interest rates \u2013 however, at this stage, we expect the BoE to simply signal that more QE could be on its way.<\/p>\n<p>We will update you about these central bank policy meetings in our weekly market summary.<\/p>\n<p><strong>Investment Management<\/strong><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n  <\/div> ","protected":false},"excerpt":{"rendered":"<p>Global equity markets have got off to a reasonable start this week, helped by news that AstraZeneca had resumed UK clinical trials of its coronavirus vaccine, 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