The strength of the market rebound from the Covid-19 crash in the second quarter of 2020 will be hard to match in the third. It occurred despite the widespread economic pain caused by lockdowns but as central banks flooded the financial system with liquidity.
The US Dollar Index has sunk to a 22-month low and registered its fourth worst three-month return in a decade as of 24 July. The relentless spread of Covid-19 across the US and improving risk sentiment elsewhere is crimping demand for the safe-haven reserve currency. Interest rates suggest there could be more depreciation to come.
A deeply divided America heads to the ballot box in three months. Incumbent President Trump faces Democratic nominee Joe Biden in an election that's taking place in the midst of a health crisis, a faltering economy, and widespread social unrest. This month we ask the investment teams how they're positioning for the turmoil and what November's results could mean for portfolios.
Restrictions to curtail the spread of Covid-19 have reduced operations at factories and global supply chains have been impacted. We think factory automation will accelerate further in a post-Covid world, as machines don’t get sick and can work continuously 24/7/365, excluding maintenance.
Markets are still working through the Covid-19 outbreak and the economic recession, but the November US presidential election will gradually start to capture more attention. At this point, Democrat hopeful Joe Biden is the favourite to win with a clean sweep of the houses of congress, but it is too early to take a firm view and future events could dislodge current expectations. However, we can analyse policy differences and their implications for investors.