Against a backdrop of a continuing global pandemic, trade spats, renewed regional conflicts and record-breaking collapses in GDP, we saw the best UK and Asian quarterly performance since the GFC in 2008/2009 and the S&P put in its best quarter since 1998. Admittedly, all these rebounds came on the back of an awful Q1 but even so, the magnitude of what was basically a relief rally was a surprise to many.
The month of June saw outsize returns for China and India in particular, which highlights that it is not all about the headline COVID numbers.
What is clear as we enter the second half of 2020 is the persistent narrative around central banks needing to do more. As the economic realities kick in and the realisation that the global economy has suffered a massive blow cannot be talked away with lengthy discussions about what letter shape (V, W, L) the recovery will be, more stimulus will be demanded.
Read our Market Update for July in full by clicking here, where we discuss the world’s largest economy, the United States, who continue to have the worst COVID case trajectory in the developed world. We also take a more detailed look at Facebook’s recent fall; will the trend continue?
When you look at how much of the US market gains have been made by a small number of stocks, such as Facebook, it is imperative that investors get their heads around the increasingly prevalent concentration risk.
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