Weekly Market Recap
Week in review
- Australian $17,6bn COVID stimulus package
- BoE cuts rates 50bps, GBP7bn financial stimulus
- ECB extends QE by EUR120bn and cheaper financing for banks
- U.S. Federal Reserve meeting
- Bank of Japan policy rate meeting
- Australia labourmarket report
Thought of the week
Policy actions to date have not eased anxiety about the economic impact from the spread of COVID-19 as equities plunge into bear market territory. What markets really need is a clear sign of a large and coordinated fiscal stimulus plan by the world’s largest economies, but that appears slow in coming. In the meantime, the announcement of further containment measures in Europe and the U.S. only deepen the market slide. The risk is that credit becomes squeezed and liquidity dries up. Higher funding costs through rising corporate bond yields, combined with a reduction in bank lending, could make the situation very much worse. The TED spread is one way to look at this. So far the spike is moderate compared to history. During the GFC the spread was 450bps.
So far limited signs of stress in the interbank market
TED spread, basis points
JPMorgan Global Research Enhanced Index Equity Fund
To achieve a long-term return in excess of the benchmark by investing primarily in a portfolio of companies, globally; the risk characteristics of the portfolio of securities held by the Sub-Fund will resemble the risk characteristics of the portfolio of securities held in the benchmark.