Although the FTSE-100 ended yesterday down 11.71 points (or 0.18%) and is currently down a further 100 points (1.50%) this morning, it doesn’t mean that last week’s equity market rally has run its course as there are plenty of signs that the positive sentiment is here to stay given the continuing easing of lockdowns (for example, yesterday New York City started its reopening process).
Additionally, both yesterday (Monday 8 June 2020) and today are fairly light on economic and market events – and so the market’s focus is on the results of tomorrow evening’s (7pm UK time Wednesday 10 June 2020) Fed monetary policy meeting.
Even though Friday’s (5 June 2020) US employment data was absolutely stunning (please see here), we believe that the Fed is highly likely to remain dovish (i.e. accommodating) as the economic green shoots are very tender, especially given the fact that US unemployment is still in excess of 13%. Consequently, our focus will be on the accompanying press conference, where we will be listening out for their economic projections (as these underscore the policymaker’s thinking and confidence in the recovery) and for clues on potential future changes to the structure of their stimulus program.
Investment Management Team