Weekly Market Update

Author : Rachel Poole
Date : August 22, 2020

Global Market News

Global rise despite Fed’s warnings

Global equities rose slightly from last week even amid comments from the Federal Reserve that Covid-19 will continue to weigh heavily on economic activity in the near-term and poses considerable risks to the economic outlook over the medium-term. The yield of the US 10-year Treasury note dropped to 0.63%, while the price of a barrel of West Texas Intermediate crude oil increased marginally this week, hitting $42.27. Volatility, as measured by the Cboe Volatility Index (VIX), stuck right around 22.

S&P 500 hits a new record
The S&P 500 Index hit a new record this week, wiping out the losses from March. This new high officially ended the bear market and initiated a new bull market. Since hitting a low on March 23rd, the index has risen over 50%.

Updated Market Figures

Coronavirus Updates

Covid-19 by the numbers
Global Confirmed Covid-19 cases: 22,800,000 Global Covid-19 deaths: 796,000
US Confirmed Covid-19 cases: 5,620,000 US Covid-19 deaths: 175,000
*As of Friday evening

Regeneron-Roche deal for Covid-19 drug
Regeneron is teaming up with its rival, Roche, to boost the supply of its Covid-19 drug. If approved by regulators, the deal could improve the capacity of the drug, REGN-COV2, by 3.5 times. The drug is in the late stages of clinical trials, with initial results expected by the end of September. If all goes well, it is possible the drug could receive emergency use authorization by year-end.

Geopolitics Spotlight

Mali’s president is overthrown in coup
President of Mali, Ibrahim Boubacar Keita, resigned this week after being arrested by mutinous soldiers. The coup comes after months of anti-government protests over corruption and poverty. The African Union, the United Nations, and the European Union have all condemned the coup while the Economic Community of West African States, which has been trying to mediate Mali’s political crisis over the last several months, has gone so far as to closed borders with Mali and suspended financial flows to the country.

Russian opposition leader poisoned
Prominent Russian opposition leader, Alexey Navalny, has been hospitalized after, allegedly, being poisoned. A spokesperson for Navalny said he became ill on the flight after someone had poisoned his tea. The plane was forced to make an emergency landing. Navalny has been an active anticorruption advocate, leading protests criticizing Russian President Vladimir Putin. This is yet another incident in a string of alleged poisonings tied to Moscow.

US Social and Political Developments

Democrat’s hold virtual national convention
Former Vice President Joe Biden officially accepted the Democratic Party’s nomination for president, closing the party’s 4-day virtual convention on Thursday. Kamala Harris also accepted her nomination at the event which featured a variety of speakers including Michelle and Barrack Obama, Hilary Clinton, and Jill Biden among many others. Over $70 million was raised over the length of the convention.

US wants to snapback Iran sanctions
The US is moving to reimpose sanctions on Iran, citing violations of the 2015 nuclear agreement. Other parties to the nuclear deal including France, Germany, and the United Kingdom, have criticized the action while Iran’s ambassador to the United Nations said the US cannot trigger a sanctions snapback because it withdrew from the agreement in 2018. Recently, Iran has revealed two new missiles, one of which is named after commander Qasem Soleimani who was killed in a US drone strike in January.

Corporate/Sector News

Lyft and Uber safe in California…for now

Lyft and Uber can keep operating in California – for now. A California appeals court issued an emergency stay for the ride-sharing companies after California Superior Court Judge Ethan Shulman issued a preliminary injunction ordering Lyft and Uber to classify their drivers as employees rather than independent contractors. Both Lyft and Uber can be expected to operate normally in California until at least October, but neither company is willing to comply with the state’s injunction.

Intel revives buybacks
With a $10 billion accelerated share repurchase agreement, Intel has revived its buybacks. The company’s $20 billion share repurchase program was announced last October but was suspended in March due to the pandemic.

Oracle goes after TikTok too

Oracle has also entered talks with ByteDance to purchase the North American and Australia/New Zealand business of TikTok, challenging rival Microsoft who is also in talks for the acquisition. President Trump has given ByteDance 90 days to sell off TikTok’s US operations.

Image of the Week

Video of the Week

Five factors that made the coup in Mali more likely
Source: BBC News