St. James's Place News
Equities struggle for traction
As if to emphasise that there are global issues concerning investors at present, rather than the continuing eurozone problems, worries over growth in China and the US recovery saw another week of increased demand for US and UK government debt. Second-quarter data from China pointed to growth that was not as weak as many had feared, but still soft enough to keep speculation alive about further monetary stimulus.
In the US, the second-quarter earnings season started poorly, not helped by unwelcome shocks from the technology sector. These overriding issues saw equity markets struggle for traction and volatility continue. However, despite the S&P 500 Index recording six consecutive days of negative trading before Friday’s rally, the US index fell only 0.1% for the week.
Also in this week's bulletin...
- Despite promises from the CEO of JPMorgan Chase that first-quarter trading losses would be contained to $2 billion, last week the figure swelled to $5.8 billion. These losses did little to shock investors, as its shares climbed on Friday by more than 6%.
- The release of second-quarter GDP figures confirmed expectations of weakening growth in the Chinese economy. The threat of deflation, slowing import and export growth and a worsening outlook for domestic consumption places greater pressure on the Communist Party to introduce stimulus measures.
- We hear from Hugh Young, manager of the Far East fund, and Jonathan Asante, manager of the Global Emerging Markets fund, who offer their thoughts on the region and explain how indirect investment provides exposure to the investment story but with reduced risk.
View this week's Market Bulletin (PDF), which contains thoughts and opinions of St. James’s Place and our range of investment managers on the key issues affecting investors.
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