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Market Updates

3rd – 10th September 2021

Equities in Europe decreased surrounded by uncertainty about the economic outlook, the continuing coronavirus pandemic, and central bank policy. In local currency terms, the pan-European STOXX Europe 600 Index ended the week 1.19% lower. Major stock indexes also fell. Germany’s Xetra DAX Index eased 1.09%, Italy’s FTSE MIB Index slipped 1.45%, and France’s CAC 40 Index lost 0.39%. The UK’s FTSE 100 Index declined 1.53%.

Core eurozone bond yields ended a little higher, paring previous gains, after European Central Bank (ECB) President Christine Lagarde stated the central bank’s decision to cut its emergency bond purchases was not tapering. Peripheral eurozone bond yields broadly followed yields in core markets. UK gilt yields climbed amid growing expectations that the Bank of England (BoE) might start raising short-term interest rates.

The ECB raised its forecast for 2021 economic growth to 5.0% from 4.6%, and its inflation projection to 2.2% from 1.9%. The central bank’s projections showed inflation peaking at 3.1% in the fourth quarter, and then slowing to 1.7% in 2022 and 1.5% in 2023.

UK Prime Minister Boris Johnson secured parliamentary approval for GBP 12 billion in tax increases to fund changes to social care and the National Health Service. Under the plan, some investors will face higher levies on dividends, while the national insurance contributions taken out of pay-checks will also increase.

The major US indexes pulled back over the shortened trading week– markets were closed on Monday in observance of Labor Day. The small real estate sector led the declines in the S&P 500 Index, as longer-term interest rates increased, while consumer staples and utilities stocks held up best. The small-cap Russell 2000 Index fared worst after two consecutive weeks of outperforming the large-cap benchmarks, and value stocks trailed growth shares.

The Friday morning’s producer price data appeared to reverse a downward trend in the yield on the benchmark 10-year U.S. Treasury note, leaving it modestly higher for the week. (Bond prices and yields move in opposite directions.).

Japanese equities extended their gains over the week, buoyed by political optimism and expectations of further fiscal stimulus under a new prime minister, following the decision of current Prime Minister Yoshihide Suga to step down. The Nikkei 225 Index returned 4.30%, while the broader TOPIX Index rose 3.78%. While the government again extended its coronavirus state of emergency measures, plans boosted sentiment to relax restrictions once most of the population has been vaccinated, with relaxation expected to commence around November. Against this backdrop, the yield on the 10-year Japanese government bond remained broadly unchanged from the end of the previous week at 0.04%, while the yen weakened to JPY 109.97 against the U.S. dollar (from 109.72 the prior week). 

Chinese stocks rose for the third straight week. The Shanghai Composite Index gained 3.4%, and the CSI 300 Index of large-cap stocks rallied 3.5%, according to Reuters. Strong trade data and an unexpected yet reportedly candid phone conversation between the U.S. and Chinese presidents lifted investor sentiment. The yield on China’s 10-year government bond increased and ended the week at 2.89%, while the Renminbi currency edged up 0.2% versus the U.S. dollar to 6.4423 per dollar, its strongest level since mid-June, according to Bloomberg.

Gold traded through a high of around $1,806 and a low of $1,788, and settled at $1,792.60. That was down around half a per cent and 2.2% for the week. Silver fell 3.6% over the week to end at $23.85.

China’s latest attempt to influence oil markets failed in a big way on Friday. After a drop caused by the Chinese announcement of a drawdown on its strategic reserves to supply the market, the price rose 2.3% on Friday to settle at $69.72. That left WTI up 0.6% for the week, and Friday’s rise turned a small loss for the week into a gain, with that help from China. Brent crude settled higher at $72.92.

27th August – 3rd September 2021

Market Update

Shares in Europe were little changed, as investors evaluated signs of slowing economic growth. In local currency terms, the pan-European STOXX Europe 600 Index ended the week roughly flat. Major indexes were mixed. Germany’s Xetra DAX Index fell 0.45%, while Italy’s FTSE MIB Index gained 0.22%. France’s CAC 40 Index and the UK’s FTSE 100 Index were almost flat.

Core eurozone government bond yields rose on higher-than-expected eurozone inflation and aggressive commentary from some ECB policymakers, who called for a reduction in the purchase pace of the Pandemic Emergency Purchase Program. Peripheral eurozone and UK government bond markets mostly tracked core markets.

Eurozone inflation accelerated more than forecast to 3% in August, up from 2.2% in July, and well above the ECB’s 2% target. Higher energy, food, and industrial goods prices drove the rise, according to the EU’s statistics agency.

The major US indexes ended the week mixed after the S&P MidCap 400 Index joined the S&P 500 and Nasdaq Composite indexes to reach new intraday highs on Thursday. The small real estate sector outperformed within the S&P 500, while financials lagged. Trading volumes were generally subdued during what is widely considered the last week of the summer vacation season. Markets were scheduled to be closed the following Monday in observance of Labor Day.

The jump in hourly earnings appeared to spur inflation fears and an increase in the benchmark 10-year U.S. Treasury note yield on Friday morning, leaving it modestly higher for the week. (Bond prices and yields move in opposite directions.) The broad municipal bond market was little changed throughout the week and underperformed Treasuries.

News of Prime Minister Yoshihide Suga’s resignation resulted in a strong rally in Japanese equities, removing political uncertainty and elevating expectations of increased economic stimulus. Japan’s accelerating COVID-19 vaccination drive underpinned gains. The Nikkei 225 Index soared 5.38%, while the broader TOPIX Index rose 4.49%, reaching a 30-year-high.

The yield on the 10-year Japanese government bond rose to 0.04% (from 0.02% at the end of the previous week), while the yen weakened slightly to JPY 109.98 against the U.S. dollar (from 109.83 the prior week).

Chinese stocks climbed for a second consecutive week. The Shanghai Composite Index gained 1.7% and outperformed the large-cap CSI 300 Index, which rose 0.3%, according to Reuters. On Thursday, President Xi Jinping announced the launch of a new stock exchange in Beijing.

The new exchange focuses on providing equity financing for small and mid-size enterprises, and reflects China’s strong commitment to its capital markets. News of the new stock market comes as many foreign investors have grown more wary of investing in Chinese assets following a regulatory clampdown on many industries.

The yield on the 10-year Chinese government bond fell four basis points to 2.85%. The Renminbi currency appreciated 0.5% against the U.S. dollar to 6.451.

Friday’s weak US jobs report for August naturally showed renewed interest in gold, helped weaken the US dollar, and sparked delight among many investors that the free money from the Fed and other central banks will continue for a while longer.

Gold for September delivery rose $14.30 an ounce, or 0.8% to $1830.90. Oil fell on Friday, as it became clear that Ida had not badly damaged the Gulf of Mexico production and processing facilities.

Lawsons Equity – Financial Advisors Malta

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994. Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries, click here.

20th – 27th August 2021

Weekly Market Update

Shares in Europe gained ground on central banks’ accommodative policies, indications that economic growth stayed strong in August, and hopes higher vaccination rates may help prevent hospitalisations and deaths stemming from COVID-19 from climbing to previous highs as economies reopen and case counts increase.

In local currency terms, the STOXX Europe 600 Index advanced 0.75%. Country-specific indexes also moved higher. France’s CAC 40 Index climbed 0.84%, Italy’s FTSE MIB Index ticked up 0.34%, and Germany’s Xetra Dax Index added 0.28%. The UK’s FTSE 100 Index gained 0.85%. Core and peripheral eurozone bond yields rose this week, largely reflecting moves in U.S. Treasuries. UK gilt yields broadly followed core markets this week.

The eurozone economy appeared to remain in expansion mode in August, with the early headline number for IHS Markit’s composite Purchasing Managers’ Index (PMI) coming in at 59.5, a strong reading down modestly from the 15-year high of 60.2 registered in July. (PMI readings greater than 50 indicate an expansion in economic activity levels.).

U.S. equities gained as full Food and Drug Administration (FDA) approval of the Pfizer-BioNTech COVID-19 vaccine, which supported sentiment toward an ongoing economic recovery. The tech-heavy Nasdaq Composite index outperformed the broad market S&P 500 Index and the large-cap Dow Jones Industrial Average. The Russell 2000 Index of small-cap stocks posted impressive gains. Stocks in the energy sector jumped higher as crude oil prices gained about 10% for the week.

U.S. Treasuries posted negative total returns as yields increased. The week’s positive economic data helped push yields higher, while improving sentiment toward riskier assets, such as equities, also weighed on demand for Treasuries, which investors view as a lower-risk asset class.

Japan’s stock markets climbed over the week, with the Nikkei 225 Index gaining 2.31% and the broader TOPIX Index up 2.01%, despite more negative developments on the coronavirus front. The yield on the 10-year Japanese government bond ticked up slightly to 0.02% (from 0.01% the prior week), while the yen fell to JPY 109.9 against the U.S. dollar (from the previous week’s JPY 109.7).

Chinese stocks continued to bounce back from their late-July lows. The Shanghai Composite Index rose 2.8%, and the large-cap CSI 300 Index gained 1.2%. In the bond market, the yield on the 10-year central government bond edged up two basis points to 2.89%. The Renminbi currency appreciated slightly against the U.S. dollar to close at 6.480.

Oil and gold rose sharply for different reasons on Friday. Oil due to a Gulf of Mexico storm, a usual occurrence at this time of the year, gold because Federal Reserve chair Jerome Powell offered no timetable for tapering the central bank’s $120 billion monthly bond purchases.

Brent rose $1.63, or 2.3%, to settle at $72.70 a barrel, while US West Texas Intermediate (WTI) crude rose $1.32, or 2.0%, to settle at $68.74. That was the highest close for Brent since August 2 and for WTI since August 12, according to Rifinitiv data. For the week, Brent jumped by more than 11%, and WTI rose more than 10%, which was the biggest weekly percentage gains for both since June 2020.

Gold for December delivery settled up $24.30 to $1,819.50 an ounce, the highest since the start of this month, and up 2% for the week, and the largest weekly gain since late May.

Lawsons Equity – Financial Advisors Malta

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994. Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries, click here.

13th – 20th August 2021

Weekly Market Update

European shares drew back for the week amid global concerns about the spread of the delta variant of the coronavirus, the situation in Afghanistan, and slowing growth in China. After reaching a series of record highs in the first two weeks of August, the pan-European STOXX Europe 600 Index ended the week 1.48% lower in local currency terms. Country specific indexes also declined. France’s CAC 40 Index fell 3.95%, Germany’s Xetra DAX Index was off 1.14%, Italy’s FTSE MIB Index dropped 2.78%, and the UK’s FTSE 100 Index retreated 1.84%.

Core eurozone bond yields drifted lower in the week, as investors opted for lower-risk assets. Germany’s 10-year bund yield was trading around -0.495% on Friday, compared to highs of -0.456% on Monday. In currency markets, the British pound and the Euro both weakened against the U.S. dollar, as the dollar profited from the risk-off environment.

US Stocks pulled back for the week, but not before the S&P 500 Index reached a record high of 4,480 on Monday afternoon, more than double its intraday low of 2,192 on March 23, 2020. Small-cap stocks lagged for the week, with the Russell 2000 Index briefly falling into correction territory, down more than 10% from its March 2021 peak. More signs emerged of an economic slowdown in China, and Securities and Exchange Commission Chair Gary Gensler urged caution when investing in Chinese stocks because of regulatory uncertainty and disclosure issues.

U.S. Treasury yields decreased through most of the week, with the yield on the benchmark 10-year Treasury note touching its lowest level since August 5.

Japan’s stock markets ended the week sharply lower, with the Nikkei 225 Index falling 3.45% to close at its lowest level this year. The broader TOPIX Index was down 3.03%. The yield on the 10-year Japanese government bond ticked down to 0.01%, while the yen finished the week broadly unchanged at around JPY 109.7 against the U.S. dollar.

Chinese stocks plunged as Beijing’s regulatory clampdown on the technology sector stirred uncertainty about what other sectors the government could target next. Liquor stocks dropped after state media reported the State Administration for Market Regulation was considering new regulations for liquor companies. Health care companies fell on worries that new regulations would also curb industry profits.

For the week, the Shanghai Composite Index fell 2.5%, while the CSI 300 Index of large-cap stocks shed 3.6% to its lowest close since July 28, according to Bloomberg. In Hong Kong, the benchmark Hang Seng Index fell into a bear market, losing more than 20% from its peak earlier this year. As of Friday, stock markets of China and Hong Kong lost more than USD 560 billion in market value, according to Reuters.

The Renminbi currency hit a three-week low of 6.5059 against the U.S. dollar on Friday, weakening past its 200-day moving average and the psychologically key level of 6.50 Renminbi per dollar. In the bond market, the yield on the 10-year government bond declined three basis points to close at 2.87%.

Oil prices had their biggest week of losses in more than nine months, with another fall on Friday. Brent crude fell 8%, settling down $1.27, or 1.9%, to $65.18 a barrel, its lowest since April, and down about 8% for the week. US West Texas Intermediate (WTI) crude for September settled down $1.37, or 2.2%, to $62.32 a barrel on Friday, to lose more than 9% for the week.

Gold prices edged higher and closed up 90 cents to $1,784.00 per ounce on Friday afternoon. Copper rose more than 2% to $4.13 a pound, and then rose in after-hours trading to $4.15 a pound.

Lawsons Equity – Financial Planners Malta

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994. Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries, click here.

6th – 13th August 2021

Shares in Europe advanced as investors focused on economic recovery and brushed off concerns about rising coronavirus infections in key markets and signs of slowing growth in Asia. In local currency terms, the pan-European STOXX Europe 600 Index ended the week 1.25% higher. France’s CAC 40 Index gained 1.16%, Germany’s Xetra DAX Index advanced 1.37%, and Italy’s FTSE MIB Index climbed 2.51%. The UK’s FTSE 100 Index added 1.34% on strong corporate earnings, and the British pound’s decline relative to the U.S. dollar.

Core eurozone bond yields ended roughly level, climbing into midweek and retreating on expectations that the European Central Bank could remain pacifistic for longer. Peripheral eurozone bond yields followed a similar pattern, but weakened slightly. UK gilt yields also ended roughly unchanged, although yields rose toward the end of the week as data showed strong economic growth in the second quarter, fuelling expectations that the Bank of England (BoE) may begin to withdraw its stimulus sooner.

U.S. equities gained ground with the market shrugging off the renewed spread of the coronavirus and its possible effects on future economic activity. In the S&P 500 Index, value stocks outperformed their growth counterparts. Most sectors advanced, led by materials. Energy stocks slipped on concerns that oil producers’ discipline on the supply side, and concerns that the upsurge in coronavirus infections could weigh on global demand.

The Senate passed a roughly USD 1 trillion bipartisan infrastructure package, including about USD 550 billion in new spending, that aims to rebuild traditional transportation infrastructure, improve access to broadband internet in rural areas, and upgrade the electric grid and water systems. Senate Democrats also approved a USD 3.5 trillion budget resolution, the starting point for a reconciliation bill that would address administration priorities, such as improving access to education and increasing support for families with children.

U.S. Treasury yields ticked up before retracing the move later in the week. Yields climbed, led by increases in long-maturity yields that helped steepen the Treasury yield curve. Remarks from several Federal Reserve officials supporting a sooner-than-expected tapering of the central bank’s bond purchases seemed to spur selling activity earlier in the week. On Friday morning, however, yields largely retraced their previous moves amid the release of a highly disappointing University of Michigan consumer sentiment survey.

Japan’s stock market noted modest gains for the week, with the Nikkei 225 up 0.56% and the broader TOPIX Index finishing 1.40% higher. The country’s deteriorating coronavirus situation kept risk appetites in check, as pressure grew on the government to tighten up restrictions further. Before the release of second-quarter economic growth data, Bloomberg noted expectations that Japan may have avoided a contraction, citing the country’s slow vaccination drive as a key factor. Against this backdrop, the yield on the 10-year Japanese government bond ticked up to 0.02%, while the yen was broadly unchanged at JPY 110.29 against the U.S. dollar.

Chinese stocks recorded modest gains despite concerns that increased government oversight of the country’s technology and private education industries would spread to other sectors. For the week, the large-cap CSI 300 Index added 0.5% and the benchmark Shanghai Composite Index gained 1.7%, according to Reuters. In the bond market, the yield on the 10-year government bond rose 6 basis points to 2.90%. The Renminbi currency was unchanged relative to the U.S. dollar. The official trade-weighted currency index– which measures the Renminbi’s value against a basket of foreign currencies– was close to a five-year-high.

In commodities, WTI crude for September delivery settled down 65 cents to $68.44 a barrel while October Brent crude lost 63 cents to $70.57 a barrel. Both fell further in late trading. O. That saw gold close up 1.5% on the day at $1,778.20 an ounce. Gold firmed to $1,781 in after-hours trading. At settlement, it was up 0.9% for the week.

30th July – 6th August 2021

Market Update

Shares in Europe rose on strong growth in corporate earnings and optimism about an economic recovery. In local-currency terms, the pan-European STOXX Europe 600 Index ended 1.78% higher. Major stock indexes also gained ground: France’s CAC 40 Index advanced 3.09%, Italy’s FTSE MIB Index climbed 2.51%; and Germany’s Xetra DAX Index added 1.45%. The UK’s FTSE 100 Index gained 1.29%.

Core eurozone bond yields trended lower, as an increase in coronavirus cases fueled doubts about the wider economic recovery. Peripheral eurozone bond yields largely tracked core markets. UK gilt yields also fell, broadly following core markets. However, this pullback in yields moderated later in the week due to hawkish messaging from the Bank of England (BoE).

The BoE said that “some modest tightening of monetary policy over the forecast period is likely to be necessary” should the economy evolve broadly in line with the bank’s central projections. The BoE, which left its monetary policy and quantitative easing program unchanged at its latest meeting, now expects interest rates to rise from 0.1% to 0.2% in 2022 and to 0.5% in August 2024. The central bank updated its forecast for inflation, which is likely to peak at 4% either late in 2021 or in early 2022. The outlook still calls for the economy to grow 7.25% this year, but the BoE increased its forecast for 2022 gross domestic product to 6% from 5.75%.

US Stocks recorded gains for the week, helping the large-cap benchmarks and the technology-heavy Nasdaq Composite Index to new highs. A sharp rise in longer-term interest rates following Friday’s strong monthly payrolls report augured well for banks’ lending margins and boosted financials shares, and the small utilities sector also outperformed. Energy shares lagged within the S&P 500 Index. Intermediate- and long-term Treasury yields jumped Friday morning following news of stronger-than-expected employment growth in July. (Bond prices and yields move in opposite directions.)

Japan’s stock markets made gains over the week, with the Nikkei 225 rising 1.97% and the broader TOPIX Index up 1.49%, buoyed by upbeat earnings reports. However, gains were dented by a worsening in the country’s coronavirus situation, as daily cases in Tokyo topped 5,000 for the first time, with an advisory panel of experts warning that the situation could deteriorate further. Nationwide cases also reached a record high. These developments prompted the government to expand its quasi-state of emergency to eight more prefectures, where the highly contagious delta variant is spreading rapidly. Against this backdrop, the yen was broadly unchanged, finishing the week at JPY109.7 against the U.S. dollar, while the yield on the 10-year Japanese government bond fell slightly to 0.01%.

Chinese stocks rose as the previous week’s steep declines attracted some buyers. For the week, the Shanghai Composite Index added 1.8% and the large-cap CSI 300 Index ended up 2.3% In China’s bond markets, yields stabilised after falling the previous week. The yield on the 10-year government bond declined two basis points to end the week at 2.83%.

In commodities, Gold suffered its largest fall in months as the price slid 2.6% to settle at $1,763.10 an ounce. Silver also slumped, down 3.8% to $23.30 an ounce. Brent crude oil settled down 59 cents, or 0.8%, at $70.70 a barrel, while in New York, West Texas Intermediate (WTI) crude futures fell 81, or 1.2%, to settle at $68.28 a barrel. For the week, Brent shed more than 6%, its largest week of losses in four months, and WTI tumbled nearly 7% in its biggest weekly decline in nine months. US crude prices have corrected as a result of last week’s fall and are now down 24% from the peak in May.

Lawsons Equity – Financial Planners Malta

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994. Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries, click here.

23rd – 30th July 2021

Market Update

Equities in Europe were little changed for the week. A positive outlook stimulated by strong corporate earnings was offset by worries about the spread of the delta variant of the coronavirus and volatility spurred by Chinese regulators cracking down on domestic technology and education companies. In local currency terms, the pan-European STOXX Europe 600 Index ended flat. Major indexes were mixed. Germany’s Xetra DAX Index fell 0.80%, France’s CAC 40 Index gained 0.67%, and Italy’s FTSE MIB Index rose 0.95%. The UK’s FTSE 100 Index ended was roughly flat.

Eurozone bond yields fell on concerns about the spread of the coronavirus, and doubts about reflation expectations and wider economic recovery. Peripheral market yields generally followed core markets, falling after the European Central Bank (ECB) suggested inflation could temporarily overshoot its 2% target. UK gilt yields also tracked yields in other core markets.

The major US indexes were mixed for the week. The large-cap benchmarks and the technology-focused Nasdaq Composite index managed record highs before retreating Friday to end the week with modest losses. The S&P MidCap 400 Index and the small-cap Russell 2000 Index broke a string of underperformance and recorded gains. Recently underperforming utilities shares reversed course and were among the best performers in the S&P 500 Index, along with materials and real estate stocks. Reflecting the downward growth and inflation surprises, the yield on the benchmark 10-year U.S. Treasury note ended lower for the week. (Bond prices and yields move in opposite directions.).

The eurozone economy bounced back from recession in the second quarter, growing by a faster-than-expected 2% relative to the first three months of 2021. The year-over-year growth rate of 13.7% also topped prominent estimates. Output expanded in Germany, France, Italy, and Spain, although the uptick in Germany came below forecast due to supply bottlenecks that hindered its manufacturing sector. Euro area inflation accelerated to 2.2% in July from 1.9% in June, lifted by higher energy prices. Excluding food and fuel prices, the inflation rate held steady at 0.9%.

Japan’s major stock benchmarks faced headwinds, as COVID-19 cases reached a record level and the government extended a state of emergency to combat the spread of the virus. The Nikkei 225 Index was down 0.96%, while the broader TOPIX Index lost 0.17%. The equity markets reopened Monday after a four-day weekend to mark the start of the Tokyo Olympics. The yield on the 10-year Japanese government bond ticked up to 0.020%, while the Yen finished the week and strengthened at 109.6 against the U.S. dollar.

Chinese stocks dropped after a regulatory overhaul of the for-profit education sector unveiled July 24 proved much tougher than investors expected, and fears of heightened government oversight spilled into Chinese technology, health care, and property stocks. The large-cap CSI 300 Index sank 5.5% in its worst weekly drop since February, according to Bloomberg. For July, the benchmark shed 7.9%, its biggest monthly drop since October 2018. In Hong Kong, the Hang Seng Index declined 1.4% for the week after the benchmark index shed more than 8.0% on Monday and Tuesday on record-high volumes.

China’s stock market sell-off had a relatively mild impact on the domestic bond and currency markets. The yield on the 10-year Chinese government bond shed eight basis points to close at 2.85%. The Renminbi currency edged up 0.3% against the U.S. dollar to 6.46, a gain analysts blamed more to dollar weakness than to the broader stock sell-off.

Oil prices jumped sharply for a second day in a row on Friday, hitting their highest levels in more than a year, after the stronger-than-expected US jobs report and decision by OPEC and its allies not to increase supply in April. The surge took weekly gains to between 5% and 7% for Brent and West Texas Intermediate (WTI) crude, as prices reached levels last seen in January 2020. Gold dipped again, as did silver, iron ore faded, but copper bounced on Friday. Gold finished the week under $1,700 an ounce and at a 9-month low.

Lawsons Equity – Financial Advisors Malta

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994. Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries, click here.

16th – 23rd July 2021

Market Update

Equities in Europe rose on optimism about the upcoming corporate earnings season and the European Central Bank’s (ECB) reaffirmation of its pacifistic monetary policies. These tailwinds helped reverse early weakness, resulting from fears that the spread of the delta variant of the coronavirus could prolong a global economic recovery. In local currency terms, the pan-European STOXX Europe 600 Index ended 1.49% higher. The main European stock indexes also gained, with France’s CAC 40 Index up 1.68%, Italy’s FTSE MIB Index advancing 1.34%, and Germany’s Xetra DAX Index adding 0.83%. The UK’s FTSE 100 Index ticked up 0.28%.

Core eurozone government bond yields fell. Worries about the spread of the coronavirus and the ECB, which reiterated its view that inflationary pressures should prove transitory, contributed to demand for high-quality government bonds. Peripheral eurozone bond yields largely tracked core markets. UK gilt yields fluctuated, as surging coronavirus cases spurred flows into bonds midway through the week.

The ECB kept its key policy measures unchanged, but revised its forward guidance, indicating it would keep interest rates “at their present or lower levels until it sees inflation reaching 2% well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at 2% over the medium term.” The ECB indicated this process could involve a short period in which inflation goes moderately above this target.

US stocks ended the week higher, rebounding from a sell-off on Monday. The advance was somewhat narrow, however, with much of the gains concentrated in technology and internet-related giants– the so-called FANG+ stocks.

U.S. Treasury yields followed a similar pattern to the equity benchmarks. Growing fears surrounding the delta variant spurred a steep decline in the benchmark 10-year Treasury note yield at the start of the week, which was exacerbated by technical trading factors that pushed long-term yields on Tuesday morning to their lowest levels since early February. (Bond prices and yields move in opposite directions.) Yields quickly retraced earlier moves, as worries over potential lockdowns in the U.S. eased, and demand for new issuance of investment-grade mortgage-backed securities and corporate bonds appeared to pull some investors away from Treasuries.

Japan’s stock markets closed in negative territory on Wednesday, ahead of a long weekend that marked the start of the Tokyo Olympics. The Nikkei 225 Index was down 1.63%, and the broader TOPIX Index fell 1.44%. Concerns that the Olympic games would worsen the country’s COVID-19 outbreak weighed on markets. News that support for Prime Minister Yoshihide Suga’s cabinet slid to its lowest level since he took office in September last year also dampened sentiment. The yield on the 10-year Japanese government bond fell to 0.016%, while the yen depreciated slightly to 110.45 against the U.S. dollar.

Chinese stocks recorded a mixed week. The Shanghai Composite Index rose 0.3% and outpaced the large-cap CSI 300 Index, which declined 0.1%, according to Reuters. Bond yields moved lower, as the yield on the 10-year sovereign bond shed 4 basis points to end the week at 2.93%. In currency markets, the Renminbi edged up 0.2% to close at 6.47 against the U.S. dollar.

Oil prices gained ground, rebounding the slide after OPEC+ agreed to ease its production cap over the next year or more. Brent crude oil is trading at USD 72.07 a barrel, easing in the afternoon and after-hours Friday. It was up 0.2% for the session and 0.4% for the week. Brent crude settled at $74.09 a barrel to be up around 1.2% for the week.

Gold remained over the $US1,800 mark, but is struggling to build positive momentum, given every opportunity by the rise of the new Delta Covid variant.

Lawsons Equity – Financial Planning Malta

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994. Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries, click here.

9th July – 16th July 2021

Market Update

Equities in Europe fell on worries the rise in coronavirus cases could hinder economic recovery. Some market participants are also concerned that central banks may tighten monetary policy sooner than expected to subdue inflation. In local currency terms, the pan-European STOXX Europe 600 Index ended the week 0.64% lower. Major European stock indexes also dropped. France’s CAC 40 Index slid 1.06%, Italy’s FTSE MIB Index slipped 1.03%, and Germany’s Xetra DAX Index weakened 0.94%. The UK’s FTSE 100 Index fell 1.60%.

Core eurozone government bond yields dropped, mostly tracking the move in U.S. Treasury yields, as U.S. Federal Reserve and European Central Bank (ECB) officials reaffirmed the view that inflationary pressures would prove transitory. Concerns about the rapidly spreading delta variant of the coronavirus also weighed on yields. Peripheral eurozone bond yields broadly tracked core markets. UK gilt yields ended roughly flat, as higher-than-expected inflation and hawkish commentary from two Bank of England policymakers offset some downward pressure on yields from the move in U.S. Treasuries.

The major US indexes ended lower, but the S&P 500 Index and Nasdaq Composite reached new intraday highs at midweek before falling back. The small-cap Russell 2000 Index underperformed for the third consecutive week, further giving up its leadership over the large-cap S&P 500 Index for the year-to-date period.

The yield on the benchmark 10-year U.S. Treasury note jumped briefly following the release of the retail sales data, but ended lower for the week. (Bond prices and yields move in opposite directions.) Despite the rally in Treasuries, the broad municipal bond market was little changed over most of the week.

Japan’s stock markets registered modest gains for the week, with the Nikkei 225 Index up 0.22% and the broader TOPIX Index gaining 1.04%. Tokyo was placed under its fourth coronavirus state of emergency, lasting until August 22 and covering the duration of the Olympic Games, as part of the government’s efforts to contain a resurgence in COVID-19 infections. The capital registered its highest daily count in new cases since January during the week. Against this backdrop, the yield on the 10-year Japanese government bond fell slightly to 0.02%, while the yen was broadly unchanged at JPY 110.04 against the U.S. dollar.

In a choppy week, the Shanghai Composite Index and large-cap CSI 300 Index rose by 0.4% and 0.5%, respectively. Markets showed relief after China’s second-quarter gross domestic product (GDP) report on Thursday was in line with expectations. China’s bond market recorded inflows of USD 10 billion in June. The yield on the 10-year government bond fell five basis points to 2.97%, marking the first time since August 2020 it fell below 3.0%. In currency markets, the Renminbi was little changed and closed at 6.471 versus the U.S. dollar.

OPEC+ ministers were due to meet overnight Sunday (Sydney time) to break the deadlock and try on a new output policy between Saudi Arabia and their smaller Gulf rivals, the United Arab Emirates (UAE). Ahead of that news emerging at the weekend, Brent crude settled down 12 cents at $73.59 a barrel on Friday, while in New York West Texas Intermediate (WTI), crude rose 16 cents to settle at the end of the week at $71.81 a barrel.

West Texas Intermediate fell around 4%, and Brent crude dipped 3% in what were the largest falls for five months, as nervousness about the lack of a deal on a new production cap rattled confidence.

Gold fell by $14 an ounce to $1,815 an ounce, and continued to fall in late trading to around $1,812. That still left gold up 0.2% for the week, but there’s a chance the price will slide again, with more attention focused on rising Covid Delta infections.

Lawsons Equity – Financial Planning Malta

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994. Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries, click here.

2nd July – 9th July 2021

Market Update

Shares in Europe ended little changed, recovering from a sharp pullback stemming from worries that a surge in coronavirus cases might hinder global economic growth. In local currency terms, the pan-European STOXX Europe 600 Index ended the week 0.19% higher. Major indexes were mixed. Germany’s Xetra DAX Index ticked up 0.24%, France’s CAC 40 Index declined 0.36%, and Italy’s FTSE MIB Index dropped 0.91%. The UK’s FTSE 100 Index ended the week flat.

Core eurozone bond yields tracked U.S. Treasury yields lower as global bonds rallied. The swift spread of the delta variant of the coronavirus and weak U.S. services activity data stimulated concerns about the economic outlook and drove demand for high-quality government bonds, pushing yields lower. Peripheral eurozone government bonds and UK gilts largely tracked core markets this week.

The major US benchmarks closed mixed, with large-caps and growth stocks outperforming for the second consecutive week. Within the S&P 500 Index, the interest rate-sensitive real estate sector performed best, as longer-term Treasury yields decreased sharply. Energy stocks fared the worst on worries that disagreements among major oil producers would result in some violating output restrictions. Weakness among media firms also weighed on the communication services sector. Markets were closed Monday in observance of Independence Day.

The major driver of sentiment during the week appeared to be the steep decline in U.S. Treasury yields, with the yield on the benchmark 10-year Treasury note hitting a nearly five-month low on Thursday. The 10-year Treasury note yield sank to 1.25% in intraday trading on Thursday, before partially retracing earlier moves.

The European Central Bank (ECB) adopted a 2% inflation target over the medium term– discarding the previous objective of “below, but close to, 2%”– after reviewing its strategy. ECB President Christine Lagarde said the new target meant the central bank “considers positive and negative deviations of inflation from the target equally undesirable.” She said the ECB would use “persistent or especially forceful monetary policy action” when interest rates are close to their lower limit and inflation remains below its target. The shift “may also imply a transitory period in which inflation is moderately above the target.” Lagarde said the new strategy was “quite squarely” not the same as the U.S. Federal Reserve’s average inflation policy.

Japan’s stock markets noted sharp losses for the week, with the Nikkei 225 Index falling 2.93% and the broader TOPIX Index down 2.25%. Concerns dampened sentiment that the spread of the delta variant of the coronavirus would stall a global economic recovery. The yield on the 10-year Japanese government bond pulled back to 0.03% amid expectations that major central banks will not tighten monetary policy any time soon, while the pandemic continues to pose risks to growth. The yen strengthened to JPY 110.01 against the U.S. dollar on safe-haven demand.

Chinese stocks were mixed for the week, with the benchmark Shanghai Composite Index edging slightly higher and the large-cap CSI 300 Index recording a modest loss. Selling was pronounced in technology stocks amid heightened regulatory risk on reports that Beijing will tighten oversight of U.S.-listed Chinese companies, many of which are in the tech sector, as well as the government’s continued crackdown on domestic tech companies. For the week, the yield on China’s 10-year sovereign bond fell eight basis points to 3.02%. The Renminbi currency shed 0.2% to close at 6.487 against the U.S. dollar.

In commodities, Brent crude oil futures were up $1.43 or 1.93%, at $75.55. US West Texas Intermediate futures were up $1.62, or 2.2%, at $74.56. Prices on both sides of the Atlantic ended the week little changed, despite significant daily fluctuations.

Gold gained 0.6% to $1,810.60 an ounce, silver rose 0.4% to $26.25 an ounce, and copper surged 1.9% to $4.34 a pound. That’s the first time in three weeks that gold has climbed over and ended above $1,800 an ounce. That left the metal up 1.8% for the week.

Lawsons Equity – Financial Planning Malta

Lawsons Equity Limited is a company registered in Malta with company number C49564 and licensed by the Malta Financial Services Authority as Enrolled Insurance Brokers under the Insurance Intermediaries Act 2006, and to provide Investment Services under the Investment Services Act, 1994. Lawsons Equity Ltd have passported their services across the EU. To see a full list of countries, click here.

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