ROOF Highlights

The divergence between our Style and Sector ROOF variants turned into a convergence on the weak side this week as investor’s risk aversion levels surged in the face of rising new infections across major markets hopes for a second fiscal stimulus package in the US before the elections (Nov 3) diminished.

Investor sentiment continued to diverge between our Style and Sector ROOF variants last week with the latter being more neutral than the former.

Investor sentiment declined this past week for all markets we track except the UK. Increasingly negative narrative on the resurgence of new Covid-19 infections across Europe and the US, culminating last Friday with the news that President Trump himself tested positive, weighed on sentiment.

Sentiment has now receded to the neutral zone for the US, Global Developed, UK, and Developed European markets according to at least one of our ROOF variants in each case, and for both variants in some (US in particular).

US existing and new home sales numbers for August, and the weekly jobless report. PMI surveys for the US, UK, Eurozone, Japan, and Australia. Interest rate decision by the BoC, and UK and Eurozone consumer confidence.

In the US, the Fed’s monetary policy meeting, industrial production, retail sales, building permits, and housing starts.

US inflation rate and job openings, and ECB monetary policy meeting. In the UK, a new round of Brexit talks will resume after negotiations in August ended without any progress on key issues.

US non-farm payrolls expected to rise by over 1 million in August and unemployment rate below 10% for the first time since April.

Jackson Hole symposium will be carefully watched for signs other central banks agree with the Fed that the economic impact of the pandemic is bigger than they thought.

Covid-19 developments globally and flash PMI surveys for the US, UK, Eurozone, Japan, and Australia will provide an insight into whether these economies continued to recover amid a resurgence in COVID-19 infections.

Covid-19 developments globally and Q2 GDP data for the UK, industrial production for the US, China, Eurozone, UK and, retail sales and inflation numbers for the US and China.

Covid-19 developments globally and the US earnings season with about a quarter of S&P 500 companies reporting second-quarter results.