Market overview – Duncan Gwyther, Chief Investment Officer
A mildly risk-off week for global equities last week, with a slight pick-up in volatility. With the Q2 corporate results season more or less complete – 87% of US companies beat estimates – the lack of news flow over the holiday period combined with thin trading may mean markets take a breather. There is plenty to still worry about in terms of whether the resurgence in COVID infections globally will at some point dampen economic activity or that the Federal Reserve will surprise markets with more immediate taper action. For many companies their more immediate concerns relate to ongoing supply chain disruptions and skilled labour shortages, both of which could pressure margins where costs cannot be passed on. China’s regulatory tightening is also creating uncertainty beyond the high profile ‘tech’ companies targeted so far; if the moves represent a new policy of wealth distribution others will likely be impacted as seen with the recent softness in the highly valued luxury goods companies. On balance, it seems likely companies will continue to adapt to market conditions, increase profits and gradually grow into their elevated valuations.
If you wanted to check out the podcast that the guys at Quilter-Cheviot put together this week, here is the link: https://soundcloud.com/quilter_cheviot/weekly-comment-markets-uncut-23082021?utm_source=clipboard&utm_campaign=wtshare&utm_medium=widget&utm_content=https%253A%252F%252Fsoundcloud.com%252Fquilter_cheviot%252Fweekly-comment-markets-uncut-23082021