Every fortnight, MutualFunds.com provides a snapshot of the performance of some key mutual funds which tries to accurately capture the investor interest in specific areas of the financial markets. The report is aimed at providing a quick overview of the sectors, regions, and asset classes that moved in a meaningful manner during the last two weeks.

• U.S. companies have started to report their second-quarter earnings, giving one of the first glimpses into the extent of the damage the coronavirus pandemic has done to the economy. Technology giants such as Microsoft, Amazon, Netflix, and Apple posted strong earnings as all of them benefitted from the stay-at-home economy. At the same time, large firms that depend on people going out saw their revenues suffer. Coca Cola said earnings dropped 33%. Under Armour reported a loss. Overall, S&P 500 companies are expected to show a 43% drop in earnings in the second quarter and a 10% decline in revenues.

• In a groundbreaking move, Eurozone countries, spearheaded by Germany and France, have agreed to raise 750 billion euros of bonds backed for the first time by the entire union to help countries most hurt by the coronavirus. The money will be handed out as grants and will not be added to the countries’ debt piles.

• The U.S. Federal Reserve has kept interest rates on hold at near zero and reiterated it would maintain them at that level for as long as necessary. The Fed said it saw growth picking up, but warned future growth depended on the path of the coronavirus.

• In another escalation of tensions between the U.S. and China, President Donald Trump threatened to ban Chinese short-video app TikTok, but later backed down and showed a willingness to support the sale of U.S. operations to Microsoft.

• Unemployment claims in the U.S. have risen for two consecutive weeks, triggering worries that it could stabilize at a very high level. For the two weeks ended July 30, around 2.8 million Americans filed for unemployment, up from around 2.6 million in the two prior weeks. The number of weekly claims has been above one million since March 26, when the first effects of the pandemic started to be felt.

• On the bright side, a host of European manufacturing and services purchasing managers’ indexes (PMI) have been in expansion territory, showing optimism is building up in the Eurozone economy after the monetary support from the European Central Bank and an unprecedented package of 750 billion euros (or approximately $857 billion) from the Eurozone to help less wealthy countries in the block.

• Germany’s flash manufacturing PMI stands at 50, a level not reached since the end of 2018, well before the coronavirus pandemic. Meanwhile, Germany’s services PMI hit 56.7, the highest mark since January 2018.

• The U.S. was hit hard in the second quarter, with the economy tanking by a record 32.9% on an annualized basis.

• We provide this report on a fortnightly basis. To stay up to date with mutual fund market events, come back to our News page here.

• Markets have posted gains over the past two weeks.

• Vanguard’s mid-cap index fund (VMCIX) gained the most from the pack, up nearly 2%.

• Meanwhile, Wilshire 5000 Index fund (WFIVX) was the worst performer, although still up 1.47%.

• Fixed income assets all posted gains.

• Vanguard’s short-term Treasury fund (VFISX) was the worst performer from the bunch with a tepid advance of 0.09%.

• Vanguard’s high-yield corporate bonds fund (VWEHX) was the best performer with an advance of 2.1%, as investors finally started to see the value in beaten-down junk bonds.

• Most sectors posted positive performance, but there are four exceptions, including healthcare, industrials, materials, and energy.

• Vanguard’s technology sector fund (VITAX) is the best performer from the pack with an advance of 3.64%, as many companies reported strong earnings despite headwinds from the coronavirus.

• At the same time, Vanguard’s energy sector fund (VGENX) fell nearly 1.8%, becoming the worst performer from the bunch.

• Foreign equities were all up, with the exception of Europe and Japan.

• Fidelity’s Latin America fund (FLATX) was the best performer these past two weeks with an advance of 2.8%.

• As investors flocked to riskier assets, T. Rowe Price’s Japanese fund (PRJPX) shed 2.7% and is the worst performer from the pack.

• Alternative assets all posted gains.

• PIMCO’s commodity real return strategy fund (PCRIX) is again the best performer from the pack, climbing 3.7%.

• At the other end of the spectrum, PIMCO’s emerging markets currencies fund (PLMIX) is up just 1.2%.

U.S. equities have continued to post gains across the board, while short-term Treasuries were among the worst performers. In the various sectors, energy, industrials, and healthcare were the rare losers, while technology was again the best performer. Japanese shares suffered as investors flocked to riskier assets such as Latin America, which posted the best gains from foreign equities.

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