Weekly Market Recap 20201214 | J.P. Morgan Asset Management

Weekly Market Recap

All I want for Christmas

14/12/2020

Week in review

Australian business confidence jumps
Australian consumer confidence surges to 120
Chinese inflation rate falls to -0.50%

Week ahead

RBA minutes of policy meeting
Australia employment report
Eurozone PMI manufacturing

Thought of the week

Vaccine or no vaccine the impacts of COVID-19 will linger in markets and economies into the new year. The path of the virus varies by economy and means that the global recovery will be uneven. The U.S. and Europe are at different stages of their second waves of the virus. At the time of writing U.S. politicians are still trying to pull together a stimulus package to cushion the economic impact and extend support measures to households and heavily impacted sectors. The worsening economic outlook may spur them to broker a deal, but nothing is certain. Meanwhile, the Eurozone outlook is starting to improve as the benefit of earlier containment measures is starting to show through in some places. This is reflected in the degree of surprise in economic data. The surprise level in both regions had moved together recently, they are now starting to diverge with the Eurozone in the lead. The U.S economy is likely to lag the rest of the world heading into 2021 unless a stimulus package is under the tree at Christmas.

Economic surprise is diverging as the virus spreads
Index

Source: Citi, FactSet, J.P. Morgan Asset Management, all returns in local currency unless otherwise stated.
Equity price levels and returns: Levels are prices and returns represent total returns for stated period.
Bond yields and returns: Yields are yield to maturity for government bonds and yield to worst for corporate bonds. All returns represent total returns. AusBond Comp is the AusBond Composite 0+ Yr, AusBond IG is the AusBond Credit 0+ Yr both provided by Bloomberg.
Currencies: All cross rates are against the Australian dollar. An appreciation of the foreign currency against the Australian dollar would be positive and a depreciation of the foreign currency against the Australian dollar would be negative.

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