The Global Economy is recovering gradually but the pace of people infected by the Corona Virus continues to worry health authorities throughout the world. The global recovery is estimated to overcome pre-crisis levels in mid 2021. In the US, stock indices showed upward trends with corrections at every announcements about victims and confirmed cases by the virus. Unemployment slid to 13.3% from 14.7% but the GDP continues to shrink by 5% (QoQ) from +2.1%. Change in non-farm payrolls was increased by 2.5mln people. Optimism prevails in the real estate industry as new home sales increased by 16.6%.
In Europe, the gradual end of the lockdown, led to the return of the economies to normality with many exceptions and new regulations. The closing of the borders to third countries (outside the EU) hit the tourist industry most. European GDP continues to shrink by 3.1% (yearly) and 3.6% (quarterly). Industrial production fell by 28% from previous fall by 13.5%. Consumer confidence recovered slightly to -14.7% from -18.8% and the industrial sentiment remains negative to -21.7 from -27.5 with the zero inflation (0.1%) not giving prospects to growth in the next quarters.
In China, signs of slight recovery were seen as data released in June concerning May showed GDP growth at 4.4% versus 3.9%. There are still problems with exports which fell sharply at -3.3% from -3.5% but imports dropped to -16.7% from -14.2%.
In Greece, the stock market traded in parallel levels around 640-680 levels with low volumes. However, there was a great interest in the new 10-year government bond issue which was covered by 7 times and the greek government raised €2bln at 1.55% cost.
The EUR/USD closed in June just below 1.13 with a continuously devaluation of the US dollar mainly due to the ample supply of the currency.
Our preference remains the american equities versus european stocks where we hold no position. US equities hold 60% of the total portfolio which the technological sector holding 60%. Cash remains crucial as corrections are buying opportunities often.
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