The week started buoyantly with markets in a risk-on mood following positive news about vaccine trials and governments ordering doses of the vaccine in their tens of millions.  However, this positive outlook slowly deteriorated throughout the week, as concerns over the US economic recovery became the main anxiety for markets.

With critical unemployment benefits due to expire at the end of the week and rising COVID-19 cases hitting 4 million, the US is looking less like the poster child for tackling the virus crisis.  A rare press conference from President Trump admitting that things would get worse before they got better, highlighted this decrease in sentiment.  To add to the woes for Donald Trump, we saw US/China tensions increase with retaliatory consulate closings.

Against this backdrop the majority of global equity markets slipped lower, with value outperforming growth for the second consecutive week.  Meanwhile, safe haven assets such as US Treasuries and gold, edged higher.

In the UK, we were hit with the sudden exclusion of Spain from the travel corridor exemption list, with France also advising against travelling to parts of the country.  Britons who have already travelled for their summer holidays will now be required to self-isolate, with a 14-day quarantine immediately imposed by the Government.

This has seen shares falling for airline and tourism companies, which have already been hit extremely hard during this unprecedented crisis.  The uncertainty and confusion will undoubtedly be damaging for businesses and disappointing for those looking forward to a well-deserved break.

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