Outlook
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Markets remained firmly focused on China and its property sector woes although there were a few signs growth was stabilising thanks to imports and demand for oil.

Markets rallied after the Jackson Hole Symposium. The Fed and ECB stuck to their cautious stance on inflation but said any rise would be data dependent. But then, key economic news concerning jobs and consumption in the US came in somewhat below expectations. The JOLTS (Job Openings) data fell from 9.17 million in June to 8.83 million in July, accentuating a trend first seen in January. And in a sign that staff were less confident about finding a new job, the number of resignations also fell. As for consumers, the Conference Board gauge fell more than expected in August. For the moment, these indicators suggest a return towards normal levels; they are in fact still high. Household spending, for example, rose 0.6% in July compared to June. The definitive GDP figure in the US was revised down to an annualised 2.1% which was less than expected. And PCE inflation indicators in the US rose by 0.2% MoM for the core element and 4.2% over a year, or in line with estimates.

Sharply lower PMIs in the US and Europe helped halt the rise in oil and bond prices that had pushed equity markets lower in August.

Risk assets have lost ground since the beginning of August. As August 15 is a national holiday in some countries, thin summer trading was accentuated as bond yields revisited recent highs and worries mounted over China’s property sector.

So far, economies have been resilient. There has been no significant rise in unemployment and both consumption and corporate profits are holding up.

US inflation was expected to fall back but not as much as it did. Over a month, it weakened to 0.18% with core inflation at 0.16%. Base effects and a lull in transport and property prices were behind the drop.

Our education system, indeed, the very idea of education, is rooted in decades, or even centuries, of tradition and shared experiences. The recent public health crisis saw the introduction of digitalisation of education - in a necessary precipitation. Even, this very specific context did not bring any radical changes.

The first half was full of surprises for investors. Equity market returns were much better than expected. Most people expected a recession but it failed to have much impact and the US economy and its financial sector proved particularly resilient to a banking crisis which could have been much more serious.

With the July 4 holiday in the US and the second quarter earnings season imminent, it could have been a quiet week. Instead, volatility resurfaced on both equity and bond markets as advanced indicators unsettled investors.

The first half was full of surprises for investors. Equity market returns were much better than expected.