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  • Stock market performance has been anaemic during the past week. Measured in US dollars, the MSCI All Country World Index for equities has lost roughly 4% so far in September, bringing the index back to about where it was at the start of 2020. There are many reasons for this, but mainly worries about new coronavirus outbreaks and disappointment following the US Federal Reserve's press conference last week.

  • Profit-taking − especially by investors in American technology stocks − continued during much of last week, but many markets rebounded towards the end. As a result, the MSCI All Country World Index of equities has been largely unchanged over the past week. It is a normal pattern for stock markets to take a breather after a sharp upturn like the one we have seen in recent months.
    Meanwhile there has been no shortage of news headlines this past week, for example that after first pausing Phase 3 trials of its COVID-19 vaccine, AstraZeneca has now resumed them. Some pharmaceutical companies are saying that a vaccine may be available before the end of 2020. This has fuelled risk appetite in financial markets, despite new virus spread reports.

  • International stock markets showed signs of stabilising after last week's price plunge. The downturn is explained primarily by profit-taking in the technology sector, which has seen surging share prices in recent months. In the United States, the tech-heavy Nasdaq Composite index − which had gained a record-breaking 76% by September 2 after bottoming out in March − lost 6% later in the week and fell by another 4% when US exchanges reopened on September 8 after a national holiday.

  • Optimism about economic growth, as well as low interest rates and bond yields, are generating continued risk appetite despite uncertainty about COVID-19 developments. Last month will go down in history as the best August for equities since 1986, with America's broad S&P 500 index gaining 7%.

  • Global share prices, as measured by the MSCI All Country World Index in US dollars, have continued upward. Meanwhile in the United States, the S&P 500 index again climbed to new all-time highs and has thus gained more than 55 per cent since stock markets bottomed out in March. Several companies have released promising news about future COVID-19 vaccines, and the US has resumed trade talks with China. Hurricanes heading for the US contributed to the oil price rising to its highest level in about 5 months (Brent at USD 46/barrel).