D-PIMS Weekly Market Update - Week of 17th to 23rd May 2021
Today’s Monday Update:
Over the course of the last week, headlines were mostly economic or Coronavirus related:
• On Monday, friends could be hugged, pints could be pulled as swathes of the British economy reopened, giving 65 million people a measure of freedom after the gloom of a four-month COVID-19 lockdown.
On Monday, the European Union agreed to a partial truce with the United States in a dispute over metal tariffs imposed by former president Donald Trump and to start discussions on global overcapacity and China's "trade-distorting" policies. The European Commission said it would suspend a planned hike of retaliatory tariffs for up to six months. These would have added U.S. products from lipstick to sports shoes and doubled to 50% duties on U.S. bourbon whiskey, motorbikes and motor boats on 1st June.
Britain's relationship with the European Union will be a bit bumpy for a while, but the government is determined to get things working more smoothly, the British minister responsible for implementing the Brexit deal David Frost, said on Monday. "I think it'll be a bit bumpy, for a time but there's a lot in there, and lots of business to be done," Frost told a parliamentary committee.
• Figures out on Tuesday, showed that Britain's unemployment rate fell again to 4.8% between January and March, when the country was under a tight lockdown, and hiring rose further in April, according to data that showed employers gearing up for the easing of curbs. Economists polled by Reuters had expected the rate to hold at 4.9%, and the reading added to signs that the labour market will escape the severe hit feared at the onset of the coronavirus pandemic, thanks mostly to government jobs subsidies.
The New York attorney general’s office said on Tuesday it has now opened a criminal investigation into former President Donald Trump’s company, increasing the legal risk for Trump and his family. Attorney General Letitia James has been investigating whether the Trump Organization falsely reported property values to secure loans and obtain economic and tax benefits.
• British consumer price inflation more than doubled in April to stand at 1.5%, up from 0.7% in March, official figures showed on Wednesday. A Reuters poll of economists had pointed to a rise in inflation to 1.4%. A jump in regulated electricity and gas bills and higher clothing prices helped to push inflation up. Core inflation, which excludes energy prices and other volatile items, rose by 1.3% in the 12 months to April, the Office for National Statistics said.
• Daimler Truck and Shell New Energies said on Thursday, they have signed an agreement under which Shell commits to setting up hydrogen-refuelling stations for heavy-duty trucks that Daimler Truck will sell to its customers. Under the agreement, Shell will from 2024 launch heavy-duty hydrogen-refuelling stations between the green hydrogen production hubs at the Port of Rotterdam in the Netherlands and in Cologne and Hamburg in Germany. Daimler Truck meanwhile aims to start delivering heavy-duty hydrogen trucks to customers in 2025. "The plan aims to continuously expand the hydrogen powered freight corridor, which will cover 1,200 kms by 2025.
• A gauge of British economic growth hit its highest level on record in May as many services firms reopened their doors and factories rode a wave of demand from a recovering global economy, prompting a jump in both hiring and prices. A preliminary reading on Friday, of the UK Composite Purchasing Managers' Index (PMI) hit its highest level since it was launched in 1998 at 62.0, matching the forecast in a Reuters poll of economists and up from 60.7 in April.
Under a radical plan being drawn up by Prime Minister Boris Johnson’s officials, British homeowners would have to replace their conventional gas boilers with potentially more expensive and greener alternatives. When owner-occupiers sell their homes, or carry out significant renovations, they would need to make sure their heating systems comply with tougher new environmental standards, people familiar with the proposals said.
• Over the week, the main Global Stockmarkets were mixed, with some up and some down. Far East markets fared the best. The investment D-PIMS Portfolios were all up for the week, especially the higher risk portfolios. They were helped by their diversified exposure and technology allocations.
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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.