Market Update

It was a week brimming with news, data releases, and central bank meetings, leading to market fluctuations. Despite the volatility, most markets closed the week on a positive note, a trend we anticipate continuing in the months ahead.
Early in the week, UK Prime Minister Boris Johnson announced mandatory face coverings in English shops from July 24, aiming to prevent a potential second wave of the virus. While questions linger about shop staff not being included in this mandate and the delayed implementation, this move is expected to bolster confidence. Johnson also expressed optimism on Friday, suggesting the possibility of ending social distancing by Christmas. He granted new powers to local authorities for localized lockdowns and allocated an additional £3 billion to prevent a resurgence of the virus.
Midweek, the European Central Bank (ECB) and the Bank of Japan (BoJ) held policy meetings, making minimal changes. The ECB, led by Christine Lagarde, maintained an accommodative stance, while BoJ Governor Haruhiko Kuroda, though acknowledging the pandemic's worst might be over, cautioned on the slow recovery. Japan's struggle against deflation, a long-standing issue, contrasts with Europe's situation. The BoJ, having already heavily invested in Japanese Government Bonds, is now purchasing global equities for liquidity. In contrast, the ECB's more flexible position allows targeted expansion of its asset purchase program.
Moderna's positive safety trials for a coronavirus vaccine on Tuesday spurred its stock by 18%. However, the week ended with concerns over Russian Intelligence hacking international research centers for vaccine data, highlighting the high stakes in the Pharmaceutical and Biotechnology industry. This occurred as Brazil surpassed 2 million cases and India exceeded 1 million cases.
Amidst robust economic releases like Chinese trade data, European inflation, and strong US industrial production and inflation figures, weaker-than-expected UK GDP data served as a reminder that global economic recovery will be gradual. The anticipated V-shaped recovery is taking on a 'Nike Swoosh' shape, emphasizing the slow and steady nature of the rebound.
Looking ahead, next week will bring significant data, including US weekly jobless claims and Euro Area Consumer Confidence on Thursday (July 23, 2020), as well as the UK’s Purchasing Managers’ Index for July and June's Retail Sales, both scheduled for Friday (July 24, 2020).
On a different note, for astronomy enthusiasts, NASA's discovery of a new constellation led to the addition of a thirteenth sign, 'Ophiuchus,' shifting the dates for all other zodiac signs for individuals born between November 29 and December 27.