Weekly Market Insight

Latest Economic & Market Update 15th June 2020

15th June 2020

Good afternoon, it is 15th June 2020 and here is your economic and market update from BlackBee. 

Today we focus on:

  • High levels of volatility return as stocks bounce back from Thursday’s sell off.
  • Irish retail sector gets much needed boost as shopping centres reopen.
  • Extension of unemployment payments in US delayed.

After Thursday’s pullback where US stocks recorded their worst daily decline in 12 weeks, both US and European stocks rebounded on Friday. A pullback as experienced on Thursday was expected after the huge rally in US stocks, and with the quick bounce back on Friday, the Cboe volatility index increased to 44 points, up from 25.81 on Monday, as high levels of volatility returned to the market.

Originally not meant to be opening until 10th August, shopping centres across Ireland are reopening on Monday on the conditions that measures are put in place to make them safe. A limited amount of shoppers will be allowed in at any one time. The reopening of shopping centres will provide a much needed boost to the retail sector after sales came to a standstill when shops closed for lockdown. Although reopening is positive for the sector and is much needed, time will tell what the financial effect will be on shops due to the limiting of shoppers allowed in at any time. A savings and investment index produced by Bank of Ireland revealed today that people were saving more regularly in Q2, with the savings index reaching its second highest level since it began in 2017. There was a spike in the number of people thinking that now was a good time to save, but the survey also indicated that people will see less need to save in six months’ time indicating a pickup in spending.

Following a better than expected jobs report, Republicans are opposing a deal that extends the $600 a week unemployment payments until the end of the year, a deal that is already passed in Democrat-controlled congress, as they argue it is a disincentive for people to work and that the economy is already on the mend. The unemployment payments are set to end in July under the current stimulus package. With opposition from Republicans, the deal will be delayed. Although the last jobs report was positive, a huge amount of Americans remain unemployed.

Best & Worst Performers of Large Cap Stocks on Friday
Click the image to enlarge

Global Market Update
(as at close of markets 12/06/2020)