The U.K. Stock market
- The UK entered a recession in the second quarter as GDP suffered a record fall.
- With the government due to wind down its job retention scheme another headwind for the markets could be concerns that unemployment will increase over the coming months.
- There are also rising fears of a potential second wave of coronavirus in Europe and the UK imposed further travel restrictions.
- Our Breadth Indicator turned positive but our Momentum Indicator ticked lower.
The U.S. Stock market
- The US stock-market was higher this week.
- Negotiations regarding further coronavirus relief measures broke down in the previous week and unfortunately no progress was made this week. Talks are now likely to resume in early September with a package worth around $1.5 Trillion expected.
- The downtrend in new coronavirus cases continued and markets were lifted by news that Russia had approved a vaccine although the enthusiasm faded after reports that it has not yet been vigorously tested.
- A larger than expected fall in unemployment claims this week helped sentiment.
- Our Breadth indicator stayed positive this week but our Momentum indicator, although still positive, ticked lower.
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This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’