Global Matters Weekly – 6 July 2020

Lessons from Japan
by Richard Stutley, CFA

The summer solstice, or ‘longest day of the year’, took place in the northern hemisphere just over two weeks ago, putting those of us that live here on a path of gradually shortening days towards winter. It’s not all bad news: July and August are typically the warmest months in the UK, but after that temperatures will also steadily decline. It remains to be seen whether, like other airborne viruses, COVID-19 is more infectious in winter, leading to a fresh spike in cases, but in any event we think the world is significantly better prepared for new waves and hence the impact should be smaller. Therefore, while acknowledging this risk to markets, it has not persuaded us to de-risk the portfolios further.

Market Snapshot

  • Global manufacturing PMIs show signs of recovery
  • The WHO reported a one-day high in global coronavirus infections over the weekend
  • Brent crude rose 4.3% ending the week at $41.02 a barrel
  • Gold ended the week flat at $1771.29 an ounce