Weekly Insight May 29 | Harris Fraser
Research Insights
29 May, 2020
Weekly Insight May 29

Weekly Insight May 29

usaUS

The Sino-US relation grew tenser by the day, but global equities still went up over the week. Over the past 5 days ending Thursday, the Dow rose 3.36%, the S&P 500 gained 1.96%, while the NASDAQ slightly fell 0.07%. As for the epidemic situation, cumulative covid-19 cases has exceeded 5.8 million, with the latest infection epicentre moving to developing countries such as Brazil and India. Japan, which saw its outbreak earlier, has announced an end to the state of emergency. On the economic front, the US 2020 Q1 QoQ economic growth annualized was revised down to -5%. In the latest report, New York Federal Reserve officials claimed that US companies lost $1.7 trillion in market value due to the Sino-US trade war, the report further expects that the investment growth of these affected companies will drop nearly 2% YoY by the end of 2020. Next week, the US will release the May figures for Nonfarm Payrolls and also the ISM non-manufacturing index.

euro Europe

This week, European stocks outperformed global markets, the UK, French, and German indexes went up 3.38%, 7.35%, and 6.39% respectively over the past 5 days ending Thursday. The UK and the EU will continue trade negotiations next week, the EU Chief Brexit negotiator Michel Barnier expects a conclusion by then. Earlier, the EU trade commissioner Phil Hogan claimed that the UK might have given up on reaching a trade agreement. On the economic front, there seems to be signs of improvement, with the Eurozone economic confidence index rebounding from the earlier record low. Next week, the European Central Bank (ECB) will hold an interest rate meeting, economic data such as unemployment rates and manufacturing PMIs will also be released.

chinaChina

Against the background of rising Sino-US tensions, Hong Kong equity performance has been affected, but still stayed relatively stable over the week, the Hang Seng Index slightly gained 0.14%, while the CSI 300 grew 1.12% over the same period. The “Two Sessions” have formally ended, the National People's Congress (NPC) did not set a target economic growth for the year. Premier Li Keqiang pointed out that the "six guarantees" are the focus of this year's "six stabilities". In addition, he claimed that if the key tasks were met, China could still see positive economic growth in 2020. Data such as Caixin Manufacturing PMI will be released next week.

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<Harris Fraser Research Team>

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