D-PIMS Weekly Market Update - Week of 10th to 16th February 2020
Today’s Monday Update:
The continuing Coronavirus crisis was never far from the news headlines, but did not seem to unsettle Markets too much over the week and there were some other events:
• On Monday the results of Ireland’s election delivered a hung parliament, but with Sinn Fein getting the highest percentage of votes, albeit not the most seats. The process started to try and form some sort of coalition, but with Sinn Fein’s stated aim of uniting Ireland, that won’t be an easy task.
• Tuesday saw addresses from the chairs of both the US Fed and ECB, which were both anticipated by Markets to make announcements of more easy money. Markets were also encouraged by the day’s report of new confirmed Coronavirus cases being lower than any previously.
Boris Johnson announced the intention to proceed with the long delayed plan to build the ‘High Speed 2’ rail link, joining the Northern and Southern parts of the country. This gives Europe’s largest infrastructure project the green light, despite criticism that it is billions of pounds over budget. The project will allow the UK to catch up with countries like France and Spain which have extensive high-speed rail links. The PM told lawmakers that he would restore discipline to the project, after its costs spiralled.
• Thursday saw Boris Johnson’s carefully choreographed Cabinet reshuffle upset, with the surprise resignation of his Chancellor, Sajid Javid. This was apparently due to the Chancellor’s unwillingness to except the replacement of all his advisers. It was quickly followed up with the appointment of his deputy Rishi Sunak, which the Markets took positively believing it will lead to higher levels of spending and higher economic growth. This caused the pound to shoot up in value against the Euro and the Dollar.
• Over the week Global Stockmarkets were a bit mixed, with some up and some down. The strengthening Pound did not help, by wiping returns away from overseas investments. Despite this the D-PIMS Portfolios had an ok week, being largely positive.
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The comments made above represent our interpretation of events and market views and are in no way a guarantee of future investment performance.