Weekly Market Insight

Latest Economic & Market Update 28th September 2020

29th September 2020

Good afternoon, it is September 28th 2020 and here is your economic and market update from BlackBee. 

Today’s focus:

  • Equity markets begin week positively
  • Pound gains ahead of final round of Brexit talks

European equities opened the week strongly with cross continental indexes up at least 1%. Euro Stoxx 600 Price Index is up 1.7% while the FTSE is (as of 10am Monday) 1.4% higher than Friday’s close. The rally is primarily driven by financial shares, with European financial equity benchmark Euro Stoxx Banks up 3.21% while the London listed HSBC shares are 8.24% higher. This day last week, markets reacted poorly to the release of the FinCEN files.  Euro Stoxx Banks and HSBC (London equity) last week lost 9.5% and 6.7% respectively. This morning, it appears that the market consensus is that these financials were somewhat oversold. (Source: Bloomberg)

Positive European equity trading can also be attributed to optimism that a Brexit trade deal can be agreed. Three days of negotiations are due to commence Tuesday in Brussels. The UK team are hopeful that a deal can be struck. David Frost, the UK’s chief negotiator, said a deal was “very much possible, but equally very far from certain”. European optimism levels are unlikely to be as high following the UK government’s attempt to override last year’s agreed Brexit treaty. Micheal Martin has said that the Irish government are preparing its budget “on the basis that there will be a no-deal Brexit”. Nonetheless, Pound sterling is trading stronger 0.73% this morning (1.1035 GBP/Euro) an indicator of the market’s view that both sides will come to an agreement. (Source: FT and The Journal)

US futures are also trading higher this morning. Futures in Dow Jones, S&P 500 and NASDAQ are up 1.34%, 1.60% and 2.26% respectively, an indication of where the markets will open later today. 10 Year Treasury remains in the 0.65 – 0.67 basis point range. Upcoming US events this week include Tuesday’s first US presidential debate between Joe Biden and Donald Trump and Friday’s employment report. It is likely that markets would react more positively to a Trump victory in November.

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

Global Market Update
(as at close of markets 25/09/2020)