US stocks continued their decline this week as results from two key grocery retailers, Walmart and Target, spooked investors, as inflationary pressures impacted their results, raising concerns that pricing pressures are taking their toll on the strength of the economy. The US stock market fell 4% on Wednesday, its biggest one-day loss since June of 2020. Unless there is a sharp bounce today, the US market will not have fallen for such a sustained period since 2001 when the dotcom bubble burst. However, outside of the US, where valuations are not so stretched, the picture was not so gloomy with many regions recording gains in equity markets over the week.
As of 12pm on Friday, London time, US stocks fell 3.1% over the week, with the US technology sector declining by 3.5%. European and UK equities rose 0.3%, Japanese stocks were up by 0.7% and the Australian market increased by 1.0%, helped by commodity prices which were on a firmer footing as the US dollar weakened. Emerging markets rose 1.0%, with Latin America in particular benefitting from both the fall in the US dollar and the bounce in commodity prices.
US government bond yields, which move inversely to price, fell a little over the week, with the 10-year Treasury trading at 2.86%. German bunds were largely flat, with the 10-year currently trading at 0.98%. Whilst UK gilt yields rose, trading at 1.93% in a week that the UK’s inflation data hit 9% in the year to April, the highest level on record in over forty years, with three quarters of the increase coming from the increase in the energy price cap, which rose by 54% in April. However, price increases were also climbing in almost all categories of expenditure and inflation in the UK is forecast by the Bank of England to rise to 10% later this year.
The US dollar weakened earlier on in the week by 1.6% against a basket of internationally traded currencies, leading to a good week for commodity prices which often move inversely to the dollar. The gold price rose 1.8%, now trading at $1,848, copper was up 3.0%, now priced at $9,460 a tonne, and Brent crude oil gained 0.9%, now trading at $112.6 a barrel.
Your message (optional)
Lawsons Equity Limited is a company registered in Malta with company number C49564 and Licenced 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
In the United Kingdom, Lawsons Equity Limited is deemed authorised and regulated by the Financial Conduct Authority. Details of the Financial Services Contracts Regime, which allows EEA-based firms to operate in the UK for a limited period to carry on activities which are necessary for the performance of pre-existing contracts, are available on the Financial Conduct Authority’s website.
Copyright 2020 Lawsons Equity Ltd | Designed by Echo
Disclaimer: The information provided on this website is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning investments or investment decisions, or tax or legal advice. Similarly, any views or options expressed on this website are not intended and should not be construed as being investment, tax or legal advice or recommendations. Investment advice should always be based on the circumstances of the person to whom it is directed, which circumstances have not been taken into consideration by the persons expressing the views or opinions appearing on this website. Lawsons Equity Limited has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website. You should always take professional investment advice in connection with, or independently research and verify, any information that you find or views or opinions which you read on our website and wish to rely upon, whether for the purpose of making an investment decision or otherwise. Lawsons Equity Limited does not accept liability for losses suffered by persons as a result of information, views of opinions appearing on this website. This website is owned and operated by Lawsons Equity Limited.