July 2020 update: A better second half of the year?
3rd July 2020
Could the second half of 2020 be worse than the first half? Had it not been for the pandemic, focus in the second half of the year would have been turning to the Brexit trade deal negotiations and the US Presidential election as sources of unknowns and potential volatility. These risks still exist but the fallout from the pandemic, and the risks of a second wave are the dominant concerns.
Markets got a little ahead of themselves in June, pricing in a perfect v-shaped economic recovery, before falling back reflecting the uncertainties. However, as with the reduction in UK deaths and UK cases, there is progress in the markets. As many businesses re-open tomorrow (4 July), we look for confirmation of the green shoots of economic growth despite the coming announcement that the technical definition of recession (two quarters of economic contraction) has been met.