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D-PIMS Weekly Market Update - Week of 24th to 30th January 2022

Today’s Monday update:

Over the course of last week, market moving headlines were mostly political, Covid-19 and economically related:

• NATO said on Monday, it was putting forces on standby and reinforcing eastern Europe with more ships and fighter jets in response to Russia's military build-up at Ukraine's borders. The move added to a flurry of signals that the West is bracing for an aggressive Russian move against Ukraine, though Moscow denies any plan to invade.

European Commission Vice-President Maros Sefcovic said on Monday, discussions with Britain could resolve Northern Irish trading challenges if goodwill was maintained, after talks with British Foreign Minister Liz Truss held in a "constructive atmosphere". Sefcovic, who oversees the European Union's ties with post-Brexit Britain, said discussions needed to be "laser-focused" on practical challenges faced by people and businesses in the British province.

Fully vaccinated travellers arriving in Britain will no longer have to take a COVID-19 test (from 0400 GMT on 11th February) transport minister Grant Shapps said on Monday, as the government set out plans to move beyond restrictions and live with the virus. Currently, vaccinated people arriving in Britain are required to take a lateral flow test within 2 days of arriving. Those who do not qualify as fully vaccinated will still have to provide proof of a negative COVID-19 test before travelling and take a PCR test after arriving in Britain, he said.

• On Wednesday, Imperial College London said their COVID-19 study reported record prevalence in January after an Omicron-fuelled spike in infections , adding that infections had dropped back from their peak but were now plateauing. Imperial found that prevalence of infections between 5th and 20th January was 4.41%, more than three times higher than it was in December. Although prevalence decreased over the course of the month, the overall trend was unclear by the end of the study period, with cases rising in children and falling in adults.

In the US, the S&P 500 ended lower on Wednesday, taking an abrupt nosedive that reversed earlier solid gains after the U.S. Federal Reserve released its statement at the conclusion of its two-day policy meeting. The indexes enjoyed a brief surge after the Federal Open Markets Committee left key interest rates near zero. However, stocks slid into negative territory once Fed Chairman Jerome Powell's subsequent Q&A got under way, during which he warned that inflation remains above its long-run goal and supply problems are bigger and more long-lasting than previously thought.

• Russia said on Thursday the United States had shown it was not willing to address Moscow's main security concerns, set out during their standoff over Ukraine, but that both sides had an interest in continuing dialogue. U.S. Secretary of State Antony Blinken said on Wednesday that Washington remained committed to upholding NATO's "open-door" policy and NATO said it would not compromise its core principles. Both have said, however, they are willing to talk to Russia about arms control, confidence-building measures and limits on the size and scope of military exercises in order to reduce tensions.

US GDP grew at 5.7% last year, its fastest rate since 1984, despite two new virus variants emerging in 2021. Growth was uneven with the economy growing at 6.9% from October to December, a steep acceleration from growth of just 2.3% in the previous quarter.

• According to data published on Friday, the number of shuttered shops in Britain edged lower for the first time in four years in the final quarter of 2021, providing a glimmer of hope for the country's beleaguered shopping destinations. A joint report from the British Retail Consortium (BRC) and the Local Data Company (LDC) said Britain's shop vacancy rate was 14.4% in the fourth quarter of 2021, 0.1 percentage points below the third quarter level.

Russia on Friday sent its strongest signal so far that it is willing to engage with U.S. security proposals and reiterated that it does not want war over Ukraine. "If it depends on Russia, then there will be no war. We don't want wars. But we also won't allow our interests to be rudely trampled, to be ignored," Foreign Minister Sergei Lavrov told Russian radio stations in an interview. The comments were among the most conciliatory that Moscow has made on the Ukraine crisis, which has escalated into one of the tensest East-West standoffs since the Cold War ended three decades ago.

• Over the week, the main Global Stockmarkets, were mostly down especially China and the Far East. Markets were again weighed down by inflation concerns, but also tensions between Russia and the West over Ukraine. Over the week, all the D-PIMS Portfolios were down, especially the higher risk Portfolios. They were helped by their diversity and Absolute Return allocations.

 

The value of investments and the income from them can fall as well as rise and you may not get back the original amount you invested.


Past Performance is no guarantee of, or guide to future returns.


The comments made above represent our interpretation of events and market views and are in no way a guarantee of future investment performance.

 

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