Market Analysis – June 2020

 

Major benchmarks closed the month in positive territory, as some economic data boosted sentiment towards the end of the month. A record jump in US housing sales and a fourth straight month of growth in Chinese manufacturing, served to offset some concerns over COVID-19 infection rates.

 

In the UK, the FTSE 100 gained 1.53% in June, to 6,169.74, the domestically focused FTSE 250 rose 0.45% in the month to close on 17,119.16. The Junior AIM index closed on 883.75, a monthly gain of 0.96%.The blue chip index closed Q2 up 8.78%, its biggest quarterly gain since 2010, as a host of global stimulus and an uptick in business activity as lockdown measures ease, strengthened optimism about a post-pandemic economic recovery. Concerns do exist, as local lockdown measures were imposed on Leicester due to virus flare-ups in the city.

 

On European markets, the Euro Stoxx gained 6.03% in the month and in Japan, the Nikkei 225 gained 1.88%. In the US, the Dow Jones advanced 1.69% in the month to 25,812.88, while the tech orientated NASDAQ returned 5.99% to finish June on 10,058.77. The Dow jumped over 17%, and the NASDAQ over 30% in Q2, marking these indices’ best overall quarters since 1987 and 2001, respectively.

 

On the foreign exchanges, sterling closed the month at $1.23 against the US dollar. The euro closed at €1.10 against sterling and at $1.12 against the US dollar. Gold is currently trading at around $1,783 a troy ounce, a gain of 3.09% on the month. Investors are keeping the precious metal in bullish territory despite a surge in risk appetite. Brent Crude is currently trading at around$41 per barrel, a gain of around 15% on the month. A recent poll, highlights expectations of a modest recovery in oil demand in Q3 and a stronger rebound towards the end of the year and into next, as oil demand is expected to pick up.

 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.

 

The value of investments may fall as well as rise. You may get back less than you originally invested.

THE VALUE OF INVESTMENTS MAY FALL AS WELL AS RISE. YOU MAY GET BACK LESS THAN YOU ORIGINALLY INVESTED.

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