Weekly Market View through 20th August 2021

Weekly Market View through 20th August 2021

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UK Stock-Market

  • The week started off on a down note after data indicated a sharp slowdown in China. Chinese industrial production and retail sales figures both missed forecasts. Also weighing on sentiment were concerns over rising global coronavirus cases and the potential geopolitical ramifications arising from the collapse of the government in Afghanistan.
  • UK unemployment rate fell to 4.7% during the second quarter, just below expectations of 4.8%, and the number of employees in UK jobs was up by 182,000 in July.
  • On Wednesday, data from the Office for National Statistics (ONS) showed that UK Consumer price inflation slowed to 2% (year-on-year) in July which is the Bank of England target. The fall from 2.5% in June was more than expected and is the first downtick since February.
  • Data also showed that UK Retail Sales fell by 2.5% from a month earlier. Expectations were for a small increase.
  • Stocks rallied back a little on Tuesday but fell sharply on Thursday after minutes from the US Fed’s July meeting were released, see US Market Chart.
  • Our Breadth indicator stayed positive but our Momentum Indicator ticked lower again.

 

UK Market 20th August 2021

 

US Stock-Market

  • Events in Afghanistan and concerns over growing coronavirus numbers meant the US stock-market lost ground early in the week. It was warned that the US new Covid infection rate could climb to 200,000 a day.
  • On Thursday the market opened sharply lower (but recovered) after minutes from the US Federal Reserve’s July meeting indicated that a reduction in quantitative easing could start as early as this year. The FOMC members discussed the possible tapering as the US economy is gaining momentum but the Fed have stated that cutting back on the bond purchasing program does not necessarily mean an imminent increase in interest rates.
  • Investors are now expecting an announcement in September but more information could be forthcoming at this coming week’s Jackson Hole summit.
  • Our Breadth Indicator stayed negative and our Momentum Indicator ticked lower again.

 

US Market 20th August 2021

 

The Big Picture 20th August 2021

 

Market Sentiment 20th August 2021

 

U.S. Risk Barometer 20th August 2021

 

Europe Risk Barometer 20th August 2021

 

 

Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

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.

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