Elkstone Family Office June 2020
This month we provide an update on Markets. Equity markets rallied very strongly in April and May from their lows in March, but Global Equity returns as a whole have been flat over the past month.
Fiona Sweeney is CEO of Elkstone Private
EQUITY MARKET REVIEW
The main international equity markets, with the exception of Hong Kong, have risen by between +2.0% (UK) and +6.4% (Japan) in the month of May to date. The Global Equity Market which had fallen some -30% from the start of the year to 23rd March 2020, was down less than -8% YTD at the close of business on Thursday, 28th May 2020 (all figures in Euro terms).
As outlined previously, the US market has fared far better than European markets. The US market is down -5.0% in the YTD on the S&P 500 Index while the European market is down -14.5% on the Euro Stoxx 600 Index. The performance of the US market has been significantly bolstered by its heavy weighting in technology stocks, which have performed very well. The US NASDAQ Index, which measures the performance of technology stocks, is up +5.8% YTD after a +4.0% rise in the month of May to date.
Tensions between Hong Kong and China have driven the Hong Kong Stock-market down -8.1% in May to date, bringing the YTD return to -16.5%.
Equity Market Returns YTD to cob on Sunday, 28th June 2020 are outlined in the table below.
Markets rose from their 2020 lows (23.03,2020) during April and May, on the belief that Governments and Central Banks through Quantitative Easing (QE) and vast Fiscal Packages, have averted the prospect of an economic collapse.
June has been a choppy month for markets with investors swaying back and forth between expectations of a swift economic recovery from the pandemic-led economic slump and fears about a spike in COVID-19 cases in China and some US States.
We believe that going forward from here, equity markets will remain choppy and there will likely be better buying opportunities than at present.
Eurozone Government Bonds have posted positive returns in 2020 to date as yields have moved lower. Corporate Bonds on the other hand have posted flat returns on the main indices. Oil is currently trading at just over $40 per barrel, which is -39.7% lower than at the start of the year while Gold is trading at $1770 per ounce and is up since the start of the year.