The week in review

In the week of 9 August, the US reported continued strong growth to the extent that its central bank started to talk about tapering its quantitative easing programme, just as the European Union finally rolled out its emergency pandemic support package.
Published 17 August
3 mins

What’s happened in markets?

FTSE All Share1.682.295.4515.3023.943.205.69
Euro Stoxx 501.343.407.4921.5229.5910.6310.19
S&P 5000.752.389.0320.0134.4618.6817.57
Japan Topix1.40-0.575.959.6323.087.6310.60
MSCI Asia Pac.-1.21-5.20-1.05-1.4316.8610.3611.14
MSCI Emerg. Mkts.-0.84-
Jo’burg All Shares1.093.525.1018.7224.179.718.94
UK Gov’t Bonds0.581.545.34-2.84-1.813.981.61
US Gov’t Bonds0.100.772.37-1.55-2.144.992.35
Global Corp. Bonds0.130.722.990.082.616.794.53
Emerg. Mkt. Local-0.23-0.05-0.69-4.482.655.262.67

Figures in the respective local currencies as at the end of trading on 13/8/2021.

The week of 9 August saw the publication of the US headline consumer price index, which was hugely anticipated as it is one of the key inflationary indicator reports. The data showed the spike in price rises had moderated slightly to reach a 5.4% year-on-year increase in July, while the core number – minus the volatile energy and food prices – came in lower than expected. Jobless claims also fell for a third consecutive week and again exceeded expectations, indicating the US labour market and the overall economy continue to strengthen.

The publications promoted the more hawkish members of the Federal Reserve (Fed) committee in  Raphael Bostic and Robert Kaplan (i.e. those in favour of a focus on inflation through action) to highlight that economic progress has been made and tapering could start, potentially as early as October 2021. This is likely to become an increasingly active point of discussion as the year progresses.

On the pandemic front, the US Food and Drug Administration approved booster shots of the Moderna and Pfizer vaccines for individuals with weak immune systems, although full approval has yet to be granted.

In the UK, gross domestic product came in higher, as expected, with the economy growing by 4.8% in Q2. Although this was slightly lower than some expectations, the view is that significant numbers are still coming through, although the challenge is how to make sense of these numbers given the seismic shifts in global economies as a result of the pandemic.

And after nearly 12 months of delay from its initial announcement on 18 March 2020, the European Central Bank is starting to disburse its €750 billion emergency pandemic support package to help boost the recovery of its economies following the COVID-19 recession. 

On the corporate front, one of the key talking points continues to be China and its proposed legislation to curb monopolies. The rhetoric as to how it plans to strengthen law enforcement in sectors ranging from food and drugs to big data and artificial intelligence has spooked markets, particularly in Asia.

Elsewhere, earnings season is nearing its end with 91% of the S&P 500 and 86% of the STOXX 600 having already reported.

There have been relatively thin trading volumes over the last 30 days but, in terms of equities performance, emerging markets (-4%) continued to trade weaker as the talk of regulatory crackdown in China added further pressure to a group of economies that continues to lag with regard to the vaccine rollouts. Meanwhile, the performance of developed markets remained constant (+2%). Value stocks (+2%) moved back into prominence, while growth, along with large and small capitalisation stocks, performed in line with each other for a second week running (+1%). The financial sector (+5%) continues to lead, benefitting from its strong Q2 earnings season and a steepening of the yield curve, as central banks start to talk about tackling overheating in their economies. 

Over the same period, Japanese equites have generally underperformed as its market has lagged, given COVID-19 case numbers have maintained an upward trend, coupled with relatively low vaccine take-up.

In the fixed income market over the past 30 days, the strong unemployment data has led to a steepening of the US yield curve on a month-to-date basis, which we anticipated.

It’s been relatively quiet in currency markets. And although oil is still down over the last 30 days (-5.8%), it has recouped some of its recent losses as investors have become more optimistic about the economic outlook.




UK GDP (QoQ)4.80
UK PMI59.20
UK CPI (YoY)2.502.30
EU GDP (QoQ)2.002.00
EU PMI60.20
EU CPI (YoY)2.202.20
US GDP (QoQ)6.506.60
US PMI64.1063.00
US CPI (YoY)5.40

What’s happened in portfolios?

The week of 9 August was a quiet week for equities and fixed income holdings in our portfolios.

Our Dodge and Cox managed fund was the standout performer in the equities space, helped due to its focus on value stocks and its bias to financials.

In fixed income, a slight uptick in yields at the longer end again helped the relative performance of our AXA Investment Managers and Muzinich & Co funds, which both have a short duration bias and so are less sensitive to the increases in interest rates.

In property, we took advantage of the slightly extended premiums for our healthcare real estate investment trusts, Impact Healthcare and Target Healthcare, following the uplift in valuations reported in the week of 9 August. This provided us with an opportunity to trim our holdings back to their neutral weightings within portfolios.

What's happening this week?

17 Aug • EU Gross Domestic Product | 18 Aug • UK Consumer Price Index | 19 Aug • US FOMC Meeting Minutes

Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how their portfolios are responding to market events, or call +44 (0)1624 645000 to speak to our client services team.


If you would like to find out more about how we manage clients’ investments, please contact us on the same number as above. Or you can get in touch using the links to the forms towards the end of this page.

Sources: Nedbank Private Wealth and (1) Bloomberg; and (2) Reuters.

The value of investments can fall, as well as rise, and you might not get back the original amount invested. Exchange rate changes affect the value of investments. Past performance is not necessarily a guide to future returns. Any individual investment or security mentioned may be included in clients’ portfolios and is referenced for illustrative purposes only, not as a recommendation, not least as it may not be suitable. You should always seek professional advice before making any investment decisions.

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