It has been a historic quarter for the financial markets, as we witnessed the wildest meltdown in global equities, followed by the swiftest V-shape recovery in market history. Nasdaq closed the month of June hitting new record highs, with Technology stocks continuing to outperform all sectors, expanding the divergence across industries, and leading analysts to question if this sentiment-driven market has been detached from fundamentals.
Delta and Sigma performed well in June, accumulating healthy gains in the second half of the month after exiting the hedge position taken in May. Commodity currencies (AUD, NZD) gained strength over the past month as traders switched out of safe-havens (USD, JPY) towards riskier assets, but sentiments have been suppressed lately by the second wave of coronavirus fears and ongoing US/China trade tensions.
Till date, deaths from the coronavirus have surpassed 500,000 worldwide with over 10 million confirmed cases, and news of mutated COVID-19 strains that are even more infectious have caused new panic and fear. Rising tensions between the U.S. and China will continue to spark periodic market volatility, and we expect more political drama as we draw closer to the U.S. Presidential Elections in November.
