Weekly Market Recap
Week in review
- Australia preliminary retail sales 3.3% m/m in July
- Japanese economy shrinks 27.8% q/q in second quarter
- U.S. Fed minutes dovish on outlook
- Australia capital expenditure
- U.S. consumer confidence
- Germany Ifo survey of business sentiment
Thought of the week
Last week, the S&P 500 made a new high for the year, reversing all the losses from the COVID induced market collapse. This makes the rally from the March low the quickest turnaround from a bear market out of the last seven. Understandably, investors may be fretting over the pace and breadth of the market move when compared to the state of the U.S. economy. However, what moves markets is not the absolute level of the many indicators investors watch but the degree of surprise. Even though earnings declined by 35% compared to a year ago in second quarter U.S. earnings season, 83% of companies beat on earnings, and actual results were 25% higher than expectations. Furthermore, the Citi Economic Surprise Index, which measure the degree to which economic data is better or worse than forecasts, is over 200. Never before has this index managed to breach 100. The surprises can’t last forever.
U.S. Citi Economic Surprise Index
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.