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Vantage Point: Alphabet Soup

Since the last edition of Vantage Point, Covid-19 has wreaked both human and economic devastation on the world. In this edition, we look back at what we’ve been through, look ahead to what might happen, assess the monetary and fiscal policy response, analyze the impact on markets and finally draw some broad investment conclusions in what is a highly uncertain and rapidly-evolving situation.

Weekly Market Roundup

September 21, 2020

Start your week off right with our market snapshot from the Global Economics and Investment Analysis Group.


  • Despite a decline in US stocks, global equities finished slightly higher (0.2%) in the latest week but are down -3.0% MTD. Returns were led by emerging markets (1.6%; 0.7% MTD) and developed markets ex-US (0.8%; 0.2%). The S&P 500 fell -0.6% (-5.1% MTD) and the NASDAQ finished -0.5% lower (-8.3% MTD). Oil advanced 10% to $41.1 and gold climbed 0.5% but is flat MTD. US investment grade and high yield spreads declined slightly and interest rates on US Treasuries increased. The majors dollar index declined -0.4% and is 0.8% MTD.
  • The Fed signaled rates would stay at current levels through at least 2023 and suggested that more fiscal support was needed.
  • US jobless claims fell to 860,000 which was the third consecutive week below 1 million and the lowest since the Covid-fallout started. Continuing claims declined 916,000 to 12.63 million which is still historically elevated but the lowest since March.
  • US industrial production continues to improve but the pace is slowing. The m/m gain in August was 0.4% and down from 3.5% previously. The level of activity has recovered ~60% of the peak to trough fall YTD.
  • US capacity utilization gained for the fourth consecutive month to 71.4% in August after falling to 64.1% in April. The level pre-Covid was 76.9%.
  • US UMichigan consumer sentiment beat estimates and increased to 78.9 in September from 74.1 the prior month. The level is now the highest of the recovery but remains far below the 101.0 peak in February.
  • US retail sales growth is also improving but at a slower rate. The m/m gain was 0.6%, which was below estimates, vs. 0.9% in July and the slowest since April. Monthly spending has recovered to 1.5% above the prior YTD peak.
  • UK headline inflation fell 0.8% to 0.2% y/y in August and core inflation declined by 0.9% to 0.9%.
  • Monthly UK retail sales improved 0.6% m/m but the pace has slowed over the last three months.
  • China industrial production and retail sales growth topped estimates and improved in August. Industrial production was 5.6% y/y, up 0.8% and the highest YTD. Retail sales were 0.5% y/y, up from -1.1% y/y and also the best YTD.


  • Japan PMIs (Tuesday)
  • US Existing Home Sales (Tuesday)
  • US Markit PMIs (Wednesday)
  • Eurozone Markit PMIs (Wednesday)
  • UK Markit PMIs (Wednesday)
  • UK Consumer Confidence (Thursday)

Monthly Market Roundup

September 2020

Back to New Highs

  • Global stocks gained further in August and returned 6.2%, the best August in 32 years, bringing the YTD performance to 5.1% after surpassing the prior February peak.
  • Despite less fiscal stimulus in the US in August, the economy was resilient; however, the biggest risk is that policy is ended before the labor market has healed.
  • Globally, the goods sector continues to lead and exhibits a V-shaped recovery while many services lag. Beyond services, key issues remain in small businesses, commercial real estate, leisure/hospitality, travel, and retail.
  • Yields drifted higher as inflation estimates improved and overall economic data continued to surprise to the upside.
  • The USD continued its fall, bringing the YTD return to -4.4%. Gold’s momentum slowed and finished the month lower.
  • Driven by massive stimulus, the impact of the virus on equity market volatility has receded.
Find out more

August 2020

Global stocks gained 5.3% in July bringing the YTD loss to only -1.0%.

Stocks Gain Despite Signs of Slowing Recovery

July 2020

Global stocks gained 3.2% in June, the third monthly gain in a row and are up 40% since the YTD low on March 23 on rising optimism that major countries are on their V-shaped recovery paths. The second quarter's 19.4% return was the third highest in history.

Risk on Accelerates




Points of View

What’s priced into markets?

Interest Rates

Short term interest rates reached all-time lows in the US in May, rebounding only marginally since then. At face value, markets appear to be pricing in a significant probability of negative rates in the US. We see this scenario as unlikely.


Read More

What type of recovery is the equity market pricing in?

As currently priced, the market is expecting a sharp recovery in growth in 2021. However, our message is to remain cautious. Ultimately the impact on the economy and markets will be primarily determined by the course of the disease...


Read More

Global Economics and Investment Analysis Group

Meet the minds behind the research.

Shamik Dhar

Chief Economist


Alicia Levine, PhD

Chief Strategist


Liz Young, CFA

Director of Market Strategy


Lale Akoner

Market Strategist


Bryan Besecker, CFA, CAIA

Market Strategist


Sebastian Vismara

Financial Economist