Weekly Market Update: Global stocks fall as economic data disappoints

Read our full Market Update Week 40

Global stock markets fell throughout the week, both in local currency terms and Sterling terms. UK assets led the decline, down -3.5% on the news of weaker economic data out from the services industry. US stocks were down up -0.4% in Sterling terms, with similar returns observed in local currencies as the Pound remained relatively flat across the week. European, Emerging Markets and Japanese stocks fell -2.4%, -0.6% and -1.2% respectively. In a classic risk-off fashion, bond yields also fell, with the US 10 year yield down 15.1bps, closing the week at 1.529%. In a similar manner, UK yields fell 5.6bps and continue to yield less than half a percent. Globally, the worst performing sectors were Energy and Financials, while Technology stocks posted a modest gain. In commodities, Gold rose +0.5% in US Dollar terms whilst oil fell -5.7%.

Chief Economist Analysis

For a moment last week it seemed that the gaping “crocodile mouth”, the different messages emitted from an ailing global economy and soaring risk assets was about to close, as markets plunged nearly 3% intra week. However, a rebound on Friday sent investors back to square one, wondering when, if at all, stock market levels will finally reflect a global manufacturing crunch, especially on capital goods, trade malaise, Germany close to recession, the Chinese slowdown and an expected US earnings drop of -4% for the year to September.

George Lagarias, Chief Economist

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