Weekly Market Update

Author : Rachel Poole
Date : September 12, 2020

Global Market News

Global equities drop

Global equities were down on the week after a tech selloff on Tuesday. By the end of trading on Friday, markets had recovered much of the losses incurred at the beginning of the week. The yield on the US 10-year Treasury note was little changed, holding steady at 0.67%. On the other hand, the price of a barrel of West Texas Intermediate crude oil fell more than 5.5%, dropping to $37.52. Prompting the decline was the expectation that OPEC will boost production. Volatility, as measured by the Cboe Volatility Index (VIX) decreased from 35 to 27.

Growth expectations for US economy heighten
Economists are revising their third quarter growth expectations for the US after evidence of strong consumer spending and the rebuilding of depleted inventories. Goldman Sachs has upped its forecast to a 35% annual rate for Q3 while the Bank of America has increased its outlook to 27%. The Federal Reserve Bank of New York is being a bit more modest, predicting a 15.6% rebound.

Updated Market Figures

Coronavirus Updates

Covid-19 by the numbers
Global Confirmed Covid-19 cases: 28,300,000 Global Covid-19 deaths: 911,000
US Confirmed Covid-19 cases: 6,430,000 US Covid-19 deaths: 192,000
*As of Friday evening

AstraZeneca pauses vaccine trials
The pharmaceutical company, AstraZeneca, has made the decision to pause phase-three clinical trials for a potential Covid-19 vaccine after a participant had an adverse reaction to the vaccine. The vaccine being tested by the company was developed alongside the University of Oxford and has been viewed as a leader in the race for a vaccine.

Geopolitics Spotlight

Brexit drama heats up

This week the United Kingdom (UK) proposed a bill that would permit it to override aspects of the Brexit deal, including rules for Northern Ireland, sparking tensions with the European Union (EU). The EU says the proposed legislation has “seriously damaged” bilateral trust and has warned of possible legal action. Despite the EU’s response, the UK has said it will not withdraw the bill. Trade negotiations are scheduled to continue on Monday. Meanwhile, the UK reached a post-Brexit trade deal with Japan this week.

Israel and Bahrain reach landmark peace deal

Israel and Bahrain have reached a landmark peace deal to normalize relations between the two countries. This is the second peace deal of its kind brokered in the last month with the help of the US. Just last month, Israel and the United Arab Emirates reached a similar agreement. For decades, most Arab states have boycotted Israel, saying they would only normalize relations after the Palestinian dispute was settled.

US Social & Political Developments

Microsoft warns of foreign election interference

Microsoft has reported that Chinese, Russian, and Iranian hackers have launched cyberattacks against hundreds of entities involved with the November presidential election as well as with US-EU policy debates. Both the Trump campaign and Biden campaign have been targeted. Many of the hackers’ targets have confirmed the attempted cyberattacks but none have reported that the attacks were successful.

Record-breaking wildfires rage across the US West
Wildfires have been wreaking havoc across the western part of the US, including areas of California, Oregon, and Washington. So far, the wildfires have scorched more than 2.5 million acres of land. At least twenty people have died and thousands have been forced to evacuate.

Corporate/Sector News

Tesla suffers biggest one-day drop in tech selloff

This week markets witnessed a tech selloff, as the sector fell nearly 4.5% on the week. Tesla suffered its largest one-day drop in history on Tuesday, falling more than 21%. The fall comes after the S&P 500 Index decided not to add Tesla in a reshuffle of the index.

TikTok deadline looms
President Trump told reporters this week that there will be no extension of the TikTok deadline. To prevent a shutdown of the popular app in the US, a deal will have to be announced this coming Tuesday, September 15th. Oracle and a team made up of Microsoft and Walmart have been reportedly discussing four ways to structure an acquisition of the app’s US operations from the parent company ByteDance.

Century 21 declares Bankruptcy
Century 21 has joined other major retailers, such as Brooks Brother, J.C. Penney, and J. Crew, in the “retail graveyard.” The company has announced it will file for bankruptcy after failing to receive money from its insurers over the pandemic.

Image of the Week

Brexit tensions give sterling its worst week since March

Video of the Week

Merkel under pressure to block Nord Stream 2 pipeline after Navalny poisoning
Source: DW News