Commentary

US: Corporate earnings and macroeconomic concerns weigh on markets

The S&P 500 started the week strongly, even hitting record highs, but ultimately ended the week slightly down. Corporate earnings reports drove large moves in individual stocks—including several technology and internet-related giants. Aside from individual company reports, the spread of the delta variant weighed on markets, whilst sentiment got a boost from the U.S. Senate’s vote in favour of beginning formal consideration of a USD1 trillion infrastructure proposal.

Japan: Covid-19 continues to spread across the country

Japan’s major stock benchmarks faced headwinds as COVID-19 cases in the country reached a record level and the government extended a state of emergency to combat the spread of the virus.

China: New restrictions on the education sector send stocks lower

Chinese stocks slumped after a regulatory overhaul of the for-profit education sector was unveiled. These new restrictions proved to be much tougher than investors had expected, and fears of heightened government oversight spilled into other sectors, including technology, health care, and property stocks. The large-cap CSI 300 Index sank 5.5% in its worst weekly drop since February.

Europe: Optimism due to corporate earnings offset by delta variant

Shares in Europe were little changed. Optimism due to strong corporate earnings was offset by concerns about the spread of the delta variant of the coronavirus and volatility spurred by Chinese regulation. 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.

UK: ‘Pingdemic’ continues as consumers save rather than spend

Covid-19 cases appear to be falling in the UK, but ‘pings’ from the NHS Covid-19 app are causing widespread labour shortages. UK house price growth cooled in July as the stamp duty holiday came to an end. Over half a million people came off furlough in June as the reopening of hospitality drove a rebound in UK economic activity. Consumers continue to build up savings rather than rushing out to spend, which could slow down the economic recovery.

The Omnis Managed funds, Openwork Graphene Model Portfolios and Omnis Managed Portfolio Service provide you with a diversified asset allocation in line with your Attitude to Risk, investing in Developed Market Equities, such as UK, US, Europe and Asia Pacific as well as Emerging Market equities.  Cautious and Balanced investors will also have significant holdings in UK and Global Bonds, as well as Alternative Strategies.  We believe this multi-asset approach aims to minimise global equity market falls in volatile periods.  Past performance is not a guide to future performance.  The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations.  You may not get back the amount you originally invested.

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