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Mid-Week Market Minute 07.08.20

News |

Stocks around the globe moved higher this week in a volatile trade across the board. On the international front, Chinese stocks surged with the Shanghai Composite Index (representing the local China A-share market) gaining nearly 7% mid-week. According to Bloomberg, a front-page editorial in the China Securities Journal (state-owned media) likely fueled this week’s rally, stating that “fostering a healthy bull market after the pandemic is now more important to the economy than ever”. Stocks in China are now trading firmly in positive territory year-to-date – a welcomed sign for investors who have long been waiting to see valuations among international developed and emerging market equities start to catch up with the U.S.

The most recent spike of COVID-19 infections in several pockets of the U.S. continues to weigh on investor sentiment, along with statements made by the Atlanta Fed President Raphael Bostic this week, noting that the economic recovery in the U.S. may be starting to level off. Going forward, market participants will continue to monitor incoming economic data as well as the rapidly approaching quarter two earnings season for a pulse on the business and economic environment heading into the second half of 2020. Interest rates moved marginally lower this week, the yield on the 2-year and 10-year Treasury notes trading around 0.16% and 0.66% respectively mid-week.

Source: Morningstar, CNBC, Bloomberg, GSAM