{"id":5152,"date":"2021-07-28T12:21:30","date_gmt":"2021-07-28T11:21:30","guid":{"rendered":"https:\/\/sarasinandpartners.com\/za\/think\/the-week-in-markets-28-july-2021\/"},"modified":"2021-07-28T12:41:33","modified_gmt":"2021-07-28T11:41:33","slug":"the-week-in-markets-28-july-2021","status":"publish","type":"post","link":"https:\/\/sarasinandpartners.com\/za\/think\/the-week-in-markets-28-july-2021\/","title":{"rendered":"The week in markets – 28 July 2021"},"content":{"rendered":"

Welcome to your weekly macroeconomic round-up, where we spotlight a few of the most significant events in the last week.<\/h3>\n

UK survey data shows activity growth slowed sharply in July as Delta variant spread<\/strong><\/h3>\n

PMI surveys, which indicate how confident managers are feeling about the outlook for their business, suggested that growth in business activity fell to its lowest level in nine months in July, as the composite PMI fell from 62.2 to 57.7. Although this is significantly lower than economists\u2019 expectations, it still suggests that activity is expanding but at a slower rate than previously. Both services and manufacturing indicators fell more than expected over the month but remained in expansionary territory.<\/p>\n

Underlying the data, respondents highlighted that price pressures continued to mount, while some noted that, \u201csevere shortages of raw materials and the impact of COVID-19 isolation on staff availability\u201d resulted in a drop in output.<\/p>\n

German business expectations fall sharply in July with 64% of industrials companies reporting supply bottlenecks<\/strong><\/h3>\n

The German IFO Business Climate survey showed that business expectations for the next six months fell sharply in July, falling from 103.7 to 101.2. The institute\u2019s Business Climate index, which includes an assessment of the current conditions, fell from 101.7 in June to 100.8 in July. Respondents highlighted that rising COVID-19 cases in Germany, as well as \u2018supply bottlenecks for preliminary materials\u2019, were weighing on their ability to fulfil orders.<\/p>\n

The breadth of shortages has been increasing steadily such that 64% of German industrial firms are now reporting the presence of bottlenecks, as well as 60% of wholesalers and 43% of retailers. Their problems will only have been made worse by the flooding experienced in western Germany last week.<\/p>\n

Markets <\/strong><\/h3>\n

Global equity markets recovered last week following a brief sell-off the week prior that seems to have been triggered by Chinese regulatory concerns and rising cases of the COVID-19 Delta variant. The narrative surrounding China\u2019s recent crackdown on tech companies, such as Alibaba and DiDi, received a further shock last week as authorities turned their attention to the online school tutoring sector in China, which has experienced exceptional growth in recent years. Criticisms focus on the false advertising and \u2018disorderly development\u2019 of the industry \u2013 a curious departure from the recent regulatory escalations. Essentially, the legislation will prohibit any private company from profiting from private tutoring with some clauses that specifically prohibit foreign involvement \u2013 another worrying sign for foreign investors in Chinese companies.<\/p>\n

Look out for next week\u2019s update, where we\u2019ll be focusing on US GDP, Japanese business confidence and European confidence surveys.<\/strong><\/p>\n

\n

All details in this article are provided for information purposes only and should not be misinterpreted as investment advice or taxation advice.<\/p>\n

Where the data in this article comes partially from third party sources the accuracy, completeness or correctness of the information contained in this publication is not guaranteed, and third-party data is provided without any warranties of any kind.\u00a0 Sarasin & Partners LLP shall have no liability in connection with third party data.<\/p>\n

\u00a9 2021 Sarasin & Partners LLP \u2013 all rights reserved.\u00a0 This article can only be distributed or reproduced with permission from Sarasin & Partners LLP. Please contact marketing@sarasin.co.uk.<\/p>\n","protected":false},"excerpt":{"rendered":"

Welcome to your weekly macroeconomic round-up, where we spotlight a few of the most significant events in the last week. UK survey data shows activity growth slowed sharply in July as Delta variant spread PMI surveys, which indicate how confident managers are feeling about the outlook for their business, suggested that growth in business activity...<\/p>\n","protected":false},"author":62,"featured_media":1988,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[],"coauthors":[182],"class_list":["post-5152","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets"],"yoast_head":"\nThe week in markets - 28 July 2021 - Sarasin & Partners South Africa<\/title>\n<meta name=\"description\" content=\"UK survey data shows activity growth slowed sharply in July as Delta variant spread.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/sarasinandpartners.com\/za\/think\/the-week-in-markets-28-july-2021\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The week in markets - 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