May saw the continuation of the very strong rebound from the March equity lows. The markets over the recent past are again characterised by bad news being dismissed as short term, and largely inconsequential, and good news, however hazy or small, being seized upon to drive markets higher. Despite the market giddiness around the Gilead announcement on vaccine development at the end of April, we have had disappointingly little in the way of medical breakthroughs. At the same time, relations between China and the US have soured and are probably at a low point since this administration took office. Intuitively, there seems little to cheer about for markets.
On a more positive note, it has been said on several occasions that it takes a crisis to move the EU project forward. We might be witnessing one of those moments now as Germany and France have come up with a proposal for a recovery fund, which would be the first time that a debt would be fully financed by all 27 members.
Read our June Market Update in full by clicking here, where we discuss the the above in more detail and also take a look at the tech stocks which led the gains again in May. The ones which benefit from the change in behaviours driven by Covid-19 have done particularly well, but one issue which may affect some of the larger tech names going forward, is if Trump decides that attacking them in some form or other could be a vote winner.
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