D-PIMS Weekly Market Update - Week of 15th to 21st June 2020
Today’s Monday Update:
Over the last week, most news was either Coronavirus or economic related:
• Markets started the week in a good mood on Monday, after the US Federal Reserve and the Bank of Japan announced more economic support measures.
Sentiment was also helped by news that U.S. firms may be allowed to work with China’s Huawei on new 5G standards and a report of a new $1 trillion U.S. infrastructure programme.
• Britain’s health minister Matt Hancock, on Wednesday hailed the use of a steroid called dexamethasone for treating coronavirus patients as the best news so far of the outbreak. Trial results announced showed dexamethasone, which is used to reduce inflammation in other diseases such as arthritis, reduced death rates by around a third among COVID-19 patients on ventilators in hospital.
Also on Wednesday, the latest figures showed British inflation fell to its lowest level since June 2016 last month. Consumer price inflation slowed to 0.5% from April’s 0.8%, the Office for National Statistics said, in line with the average forecast in a poll of economists.
• The European Union is ready to go it alone with taxing digital services of firms like Google, Amazon, Facebook or Apple if there is no global deal on such a tax this year, European Economic Commissioner Paolo Gentiloni said on Thursday.
President Emmanuel Macron visited London on Thursday to mark the 80th anniversary of General de Gaulle’s famed World War II appeal to resist the Nazis and to discuss Brexit with Prime Minister Boris Johnson. It is Macron’s first trip outside France since the lockdown to control the coronavirus. He and the PM discussed the response to the pandemic, including Britain’s quarantine of travellers from abroad, as well as Brexit.
The Bank of England increased its government bond-buying programme by £100 billion on Thursday as it sought to help steer the economy away from a record slump in March and April caused by the coronavirus lockdown. It also kept its benchmark interest rate at 0.1%.
• On Friday, figures released showed that British retail sales rebounded much more strongly than expected last month as the country gradually relaxed its coronavirus lockdown, but public borrowing hit a record high and debt passed 100% of economic output.
Sales volumes in May jumped by a record 12.0% after a historic 18.0% slump in April, official data showed. The rise was at the top end of economists’ forecasts in a Reuters poll.
The GfK consumer confidence index, Britain’s longest-running such survey, recorded its biggest improvement in nearly four years this month as coronavirus lockdown restrictions eased, though it still remains far below its level at the start of this year.
The United Kingdom’s chief medical officers have agreed that the COVID-19 threat level should be lowered one notch, from 4 to 3, meaning “epidemic is in general circulation” from “transmission is high or rising exponentially”.
• Over the week, the main Global Stockmarket indices were up especially in the UK. All the investment D-PIMS Portfolios had a very positive week, especially the higher risk Portfolios. They were helped by their exposure to the UK domestic market.
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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.