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Equity markets continued their upward rise in June, with the S&P 500 having its best quarterly performance since 1998. The Nasdaq Composite rose for the first time above 10,000, rising 6% for the month of June. The S&P 500 and the Dow Jones Industrial gained respectively 1.8% and 1.7%, with all indexes rising for three consecutive months.
We alerted our readers last week of a possible meeting scheduled for June 17 between US and Chinese officials in Hawaii and promised a follow-up analysis. Rumors of the meeting reported by the POLITICO were true, and the outcome of the secret seven-hour meeting between US Secretary of State Mike Pompeo and China’s top diplomat Yang Jiechi remain somewhat unclear.
The Federal Reverse’s Federal Open Market Committee (FOMC), the central bank’s main body for monetary policy, decided to leave the federal funds rate unchanged at 0.00%-0.25% on Wednesday, June 10. The members of the FOMC expect the rate will remain unchanged until 2022.
Equity markets staged a strong rally in April continuing into May. The combination of government stimulus, Federal Reserve activating liquidity programs combined with monetary policy accommodation and optimism over businesses re-opening across the country drove markets higher.
As the United States emerges from lock-down measures, actions in recent weeks by the US and China on the geopolitical stage seem to be solidifying what many analysts are calling Cold War 2.0.
This month’s Monthly Market Commentary aims to review the financial market, provide an analysis of the situation at hand, and our outlook for the rest of 2020 as the market faces the greater impacts of the coronavirus (COVID-19).
