Weekly Digest - INVESTEC
Please find attached Weekly Digest
The US market gave up some ground towards the end of last week. Volatility remained high, with the VIX index of volatility rising for the first time since mid-March. Corporate earnings were front and centre last week. We have now had reports from 55% of the S&P 50 constituents. Over the weekend, US Secretary of State Mike Pompeo said in an interview that there is ‘enormous evidence’ to suggest that the coronavirus started in a Wuhan lab. President Trump threatened tariffs as punishment and there were rumours (later denied) that the US was considering cancelling its debt obligations with China.
Corporate earnings will (hopefully) dominate newsflow this week, with 159 S&P 500 companies and 104 Eurostoxx companies scheduled to report. Of particular interest to us will be updates from Xylem, Beyond Meat, Walt Disney, ITV, Smith & Nephew and Paypal. Hotel Chocolat issued a resilient statement this morning given the circumstances and there are a number of companies reporting that we are looking at closely.
The number of new cases per day is currently at 81,000, well within the 70k-100k per day numbers that we have seen since early April. The US continues to dominate global new infections, accounting for 36% of all new infections. The number of infections in emerging markets has begun to increase, with the number of daily new infections increasing by 30% in Russia over the last week. Brazil has seen an increase of 73% and India has seen an increase of 25%.
On a more positive note, for the first time the median growth rate of new infections for countries averaging more than 100 infections per day over the past week is negative. i.e. more than half of countries that have infections are past the peak number of daily infections. Nearly everyone in the world is restricted in one way or another.
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