Weekly Market Recap
A narrow rally
Week in review
- Australia GDP plummets 7.0%q/q in 2Q.
- RBA holds rates, increase lending to banks
- China PMI for manufacturing rises to 53.1
- Australia business confidence
- Australia consumer confidence
- Australia housing finance
Thought of the week
The S&P 500 is up just over 10% for the year and more than 50% from its low in March. However, not all companies have benefited from the rally. This week’s chart compares the performance of the S&P 500 to the S&P 500 excluding some high profile companies (Microsoft, Apple, Google, Amazon and Facebook). These companies have grown significantly in size and there is a growing concern that investors are placing too much weight on these tech and online behemoths, increasing the risk of a correction. It is possible that market nerves in the U.S. heading into the U.S. Presidential election could see some profit taking, but this should not distract from the long term secular story in tech. This is not the market of 1999/2000 when company valuations soared on the promise of future revenues. Revenues are being delivered and we are only on the cusp of what a technology revolution in cloud and AI could eventually look like.
S&P 500: The split market
Rebased to 100, 31 December 2019
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.