Monday Espresso

The French government announced the second national lockdown on Wednesday October 28 due to the surging number of coronavirus cases across the country.

On Thursday October 29, the US GDP growth for the third quarter of 2020 was published, showing a record jump of 33.1% QoQ (annualised), beating the markets expectations. Eurozone quarterly GDP was released by Eurostat on Friday October 30, growing by better-than-expected 12.7% in 3Q20. The GDP jumps were mainly driven by the reopening of the two economies following the national lockdowns in Q2.

On Thursday, ECB decided to maintain the benchmark interest rate at 0%, with the marginal lending facility and the deposit facility rates at 0.25% and -0.50% respectively. The bank however, firmly committed to providing more stimulus in December to support the economic recovery.

China revealed initial details of the new 5-year economic plan on Thursday, which includes shifting its focus to developing and promoting technologies in the domestic market in the next 5 years and the country is also expected to open up for more foreign investments.

The US Presidential Election will be held on Tuesday November 3.

The US Fed Interest Rate decision will be announced Thursday November 5 and is expected to be maintained at 0.00 – 0.25%.

-0.13*

-1.0     A score of -1.0 indicates an extremely poor economic outlook, which is accompanied by a high probability of negative returns in risky asset classes like equities. The Risk Barometer tilts our portfolios away from equities during such periods.

0.0       A score of 0 indicates a neutral economic outlook with almost equal probability of positive and negative returns in risky asset classes like equities. The Risk Barometer maintains a balance between equities and other asset classes during such periods.

+1.0   A score of +1.0 indicates an extremely positive economic outlook, which is accompanied by a high probability of positive returns in risky asset classes like equities. The Risk Barometer tilts our portfolios towards equities during such periods.

*as at latest realignment 30/10/20

Notice:

The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated, but is not an indicator of potential maximum loss for other periods or in the future.