Weekly Market Insight

Latest Economic & Market Update 24th June 2020

24th June 2020

Good afternoon, it is 24th June 2020 and here is your economic and market update from BlackBee. 

Today we focus on:

  • European stocks jump on the back of PMI reports.
  • Take caution on reading PMI figures.
  • BlackBee products providing positive returns throughout 2020.

European stocks closed higher on the back of PMI reports that showed the downturn in business activity is slowing. The EuroStoxx 50 closed 1.76% higher for the day. US stocks were on track for strong gains but the release of reports on new coronavirus cases saw stocks pare a lot of their gains, with the S&P500 closing 0.43% higher. Prior to reports that left investors worrying about the rate at which the economy would reopen, the S&P500 was up nearly 1.5%. Gold hit its highest level since 2012 as the price reached $1,768.41/oz.
June PMI readings for the Eurozone and UK showed a slowing of the downturn in business activity, helped by easing lockdown measures. Eurozone PMI stood at 31.9 in May and June showed a reading of 47.5. In the UK, PMI rose to 47 in June, up from 29 in May. The reports were received positively by investors and interpreted as sentiment improving among companies and European stocks jumped on the back of this news. However, a higher number does not indicate a v-shaped recovery. Both of these readings show a figure under 50 which suggests a contraction in business activity compared to the previous month. Since lockdown was in place for most countries in May and had been eased in June, a pickup in business activity would have been expected, but the PMI reading suggests that conditions were worse in June than in May. The PMI points to the direction of business activity but does not measure the extent to which economic activity is contracting or expanding.  
BlackBee product maturities in 2020 have provided investors with an average gross return of 8.4% (av. annualised return of 3.2%). The average term of these products was 3 years. Despite markets collapsing in March and April, BlackBee products that matured in these two months still returned on average 7.1% gross return (av. annualised return of 2.2%).

Best & Worst Performers of Large Cap Stocks on Tuesday
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Global Market Update
(as at close of markets 23/06/2020)

Recent maturities