August was another eventful month for investors which ultimately ended well. As in previous months, sentiment swung on a combination of US economic data points and central bank utterances. The economic data was noisy, clouded by the spread of the delta variant, which made it harder to discern underlying trends. Volatility was high, fuelled by thin summer trading and skittish sentiment. Gold, for example, fell -7% in a day post a strong US employment report, before recovering steadily into month-end.
Political risk continued to influence events in the Far East, with the implications of China’s ‘’common prosperity’’ policy continuing to be mulled over by investors. Balancing the needs of communist social policies with the demands of Western capital is an issue that will take time to work through and although regional stock markets recovered some of the ground lost in July, the longer run investment implications remain unclear. Late in the month, prospects of a snap election in Japan sparked a strong rally in Japanese stocks, which had been quiet of late.
“Balancing the needs of communist social policies with the demands of Western capital is an issue that will take time to work through and although regional stock markets recovered some of the ground lost in July, the longer run investment implications remain unclear.”
