D-PIMS Weekly Market Update - Week of 25th to 31st May 2020
Today’s Monday Update:
Over the last week, most news was either Coronavirus or economic related:
• On Monday the Prime Minister outlined the plans for a gradual re-opening of parts of the economy. This included outdoor markets and car showrooms from 1st June and all other non-essential retail from 15th June. This was as long as businesses were able to meet the COVID-19 secure guidelines.
Chancellor of the Exchequer Rishi Sunak authorised the roll-out of ‘Project Birch’, a large-scale bail-out plan engineered to save some of the UK’s most “strategically important” companies. Reports suggested that several large firms were asking for financial backing from the UK Government, including Jaguar Land Rover which was seeking to secure a loan of more than £1bn.
• According to an EU official on Tuesday, the European Union is willing to drop its current “maximalist” approach on fisheries in negotiations with Britain in the next week. This would be the first major concession from the bloc in talks on their ties after Brexit. This would be contingent on the UK making concessions.
The UK health ministry said that Britain will provide anti-viral drug remdesivir to certain COVID-19 patients that it is most likely to benefit, as part of a collaboration with manufacturer Gilead Sciences. The department of health said that early data from clinical trials around the world showed that the drug could shorten the recovery time of COVID-19 patients by four days.
• On Wednesday, the European Union’s executive unveiled a 750 billion euro plan to prop up economies hammered by the coronavirus crisis, hoping to end months of squabbling over how to fund a recovery that has exposed faultlines across the 27-nation bloc.
Under the proposal, which could still be blocked by more frugal northern nations, the European Commission would borrow the funds from the market and then disburse two-thirds in grants and the rest in loans to cushion the unprecedented slump expected this year due to the coronavirus lockdowns. Much of the money will go to Italy and Spain, the EU nations worst affected by the pandemic. EU leaders agree that, if they fail to rescue economies now in freefall, they risk something worse than their divisive debt crisis of a decade ago, which fanned Euroscepticism and threatened to pull the eurozone apart.
The much discussed Track & Trace system was launched in the UK with an army of 50,000 people behind it.
• On Thursday in further ‘easing’ announcement the PM said from the next Monday up to six people will be able to meet outside, including parents and grandparents. Barbecues would be allowed provided they are done in a socially distanced way.
• France’s economy contracted less than initially thought in the first quarter, although it remained mired deep in recession due to a coronavirus lockdown, data from the INSEE official stats agency showed on Friday.
During Friday’s news conference, President Trump said he was directing his administration to begin the process of eliminating special treatment for Hong Kong, but to the relief of investors he didn’t announce specific actions.
• Over the week, the main Global Stockmarket indices were up especially Europe and Japan. All the investment D-PIMS Portfolios had another very positive week, especially higher risk Portfolios. They were helped by their diversified structure and domestic UK exposure.
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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.