Across the Atlantic, the US election was moving into full swing. President Trump will be running for re-election and it is now confirmed that he will be up against Democratic presidential nominee, Joe Biden. The election is due to take place on 3rd November – which means we are going to see and hear a lot of rhetoric over the next couple of months.
The big political news towards the end of the month was Shinzo Abe stepping down last week as Japanese Prime Minister on health grounds. The Liberal Democratic Party is expected to hold its leadership election on the 14th September with votes cast by lawmakers of the national parliament and delegates from its local chapters.
The decision has caused some volatility to Japanese equities with Prime Minister Abe being the longest-serving Japanese leader, which brought with it both stability and a desire to tackle long-rooted issues (through “Abenomics”).
In investment markets, the trend of US technology stocks powering the broader US equity markets continued. The S&P 500 has been hitting fresh all-time highs towards the end of the month. The fortunes have now been shared globally and the FTSE 100 fell below the 6,000 level and very close to the level at the end of July.
Safe-haven assets have been in the ascendancy during 2020; Gold, Government Bonds and the US dollar have all performed well.
However, global risk appetite has swung into the ascendancy in recent months and these safe havens assets have lost ground. To highlight this, the UK ten-year Government Bond yield ended July at 0.1% and has increased to 0.34% – as yields increase in bonds – prices fall. This relationship is more pronounced on longer-dated bonds and these subsequently saw greater price falls during the month.
Gold had soared to a high early in the month but retreated from its high and continues to hover around the $2,000 mark.
Chief Investment Officer
The content in this publication is for your general information and use only and is not intended to address your particular requirements. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts. Levels and bases of, and reliefs from, taxation are subject to change and their value depends on the individual circumstances of the investor. The value of your investments can go down as well as up and you may get back less than you invested. Past performance is not a reliable indicator of future results.