Chillingstone House,
26 Eastwood Road, Rayleigh, Essex, SS6 7JQ
t: 01268 749 880 - For your protection all calls are recorded

D-PIMS Weekly Market Update - Week of 26th July to 1st August 2021

Today’s Monday Update:

Over the course of the last week, headlines were mostly Coronavirus and economy related:

Monday – July 26 (Reuters) - Western investors are wrestling with the risks of investing in U.S. listed stocks of Chinese companies after Beijing embarked on a regulatory crackdown on large swathes of its economy, from the internet sector to private tutoring. China's latest crackdown on technology firms was announced just two days after ride-hailing giant Didi Global Inc went public in New York at the end of last month. Its shares are down 42% since the initial public offering.

A testing scheme for staff in the UK food supply chain, as well as transport and emergency service workers, has begun today, allowing them to avoid self-isolation if they come into contact with a positive case. Senior ministers will decide later whether to further expand daily testing to fully vaccinated key workers.

China has told the US to stop "demonising" Beijing, in their most high-level talks under President Biden. China's Vice Foreign Minister Xie Feng said relations had reached a "stalemate" because the US saw China as an "imagined enemy". He is in talks with Deputy Secretary of State Wendy Sherman, the most senior US official to visit China in months. Mr Biden has taken a hard-line approach towards China, especially on issues like human rights and sanctions.

The US is heading "in the wrong direction" on the coronavirus pandemic as infections surge among the unvaccinated, the country's top infectious disease expert has warned. Dr Anthony Fauci said the Delta variant of Covid-19 was driving the spike in areas with low vaccination rates. He said health officials were considering revising mask guidance for vaccinated Americans to curb cases. Offering booster jabs to vulnerable people was also under review, he said.

Tuesday -  Asia’s stocks fell to fresh seven-month troughs on Tuesday, led by a third straight session of heavy selling of Chinese internet giants, while bond and currency markets clung to tight ranges ahead of the Federal Reserve policy meeting.

The number of confirmed daily cases in the UK has fallen for six days in a row - now standing at 24,950. It's little over a week since there were warnings we could reach 100,000 or even 200,000 cases a day. And unlike the previous two waves of Covid, it is happening without a national lockdown. Instead, we're opening up. The turnaround is as surprising as it is welcome. "It's certainly is good to see case numbers going down, but we need a reality check," Prof Christl Donnelly, from University of Oxford and Imperial College London said. "We've had a dramatic increase - and then on the face of it, a dramatic decrease. "We have to be careful not to over-interpret that."

North and South Korea have restored a communication hotline that was cut off by Pyongyang last June. According to the South's presidential office, the leaders of both countries have agreed to rebuild trust and improve ties. They have exchanged several personal letters since April, the statement added. North Korea cut the hotline in June 2020 as relations soured after a failed summit between the two countries.

More critical workers will be able to take daily tests rather than isolate when they are identified as a close contact of someone who has Covid. The UK government said 1,200 extra sites would be established, with prisons, waste management and the armed forces among the sectors prioritised. Some 800 sites are already being set up for police, firefighters, supermarket depot staff and some other industries. Several sectors have warned of staffing shortages caused by 10-day isolations.

Tesla has reported surging profits, despite shortages of semiconductor chips and congestion at ports hampering production. Sales rose to $12bn (£8.6bn) in the three months to the end of June, up from $6bn a year ago, when its US factory was shut down. The electric carmaker said it delivered a record 200,000 cars to customers in the same period.

Shares of Chinese companies listed in the US have seen their biggest two-day fall since the 2008 financial crisis. The Nasdaq Golden Dragon China Index, which follows the 98 biggest US-listed Chinese stocks, has fallen by almost 15% in the last two trading sessions. The index has now plummeted by more than 45% since hitting a record high in February. The slump comes after a series of crackdowns by Beijing on its technology and education industries.

LONDON, July 27 (Reuters) - The end of the COVID-19 pandemic in Britain could be just months away as vaccines have so dramatically reduced the risk of severe disease and death, Imperial College epidemiologist Neil Ferguson said on Tuesday. But, he said, a recent fall in daily cases still needed to be watched carefully.

Economic prospects between rich and poor nations have diverged further due to their differing access to Covid vaccines, the International Monetary Fund (IMF) has said. In a new assessment of the global outlook, the IMF says the world is increasingly split into two blocs. It has upgraded growth forecasts for developed economies for this year, including the UK. But the outlook for many developing countries has weakened.

Wednesday – Senior cabinet ministers are to discuss allowing fully vaccinated travellers from the EU and US to avoid quarantine when they arrive in England. A review of the border rules is due by 31 July. Downing Street and the Department for Transport declined to comment on newspaper reports the government would go ahead with the plan to also exempt people vaccinated in the US and EU. But the aviation industry has been pushing for a relaxation of quarantine rules for travellers from the EU and US after completing a trial of checking the vaccination status of passengers.

Sydney's lockdown has been extended by another month as Covid cases continue to rise. Australia's largest city has been under stay-at-home orders since late June due to an outbreak of the Delta variant. More than 2,500 people have been infected in Sydney's worst outbreak this year. Premier Gladys Berejiklian said it was not possible for the city to exit lockdown on Friday as had been planned. Several thousand people staged "freedom" protests in Sydney, Melbourne and other cities on the weekend. It has also highlighted the nation's bungled vaccine programme, which began in February. Just 16% of Australia's adult population is vaccinated.

Boris Johnson has suggested that vaccine passports could become mandatory across a wide range of settings including festivals, sports matches and airports. Asked if people who refused vaccines would be excluded from nightclubs, sports stadia or even universities, the prime minister said that getting a jab would “help you, not hinder you”.

Apple racked up record profits thanks to a continuing surge in iPhone sales, suggesting that the Covid-inspired sales boom shows little sign of abating. Revenues rose by 36 per cent to $81.4 billion — a record for its third quarter and higher than the $73 billion consensus forecast — amid robust demand across its slate of gadgets.

British Foreign Secretary Dominic Raab warned that the world would not be vaccinated until 2024 under current rates, and urged other countries to join Britain in donating shots to poorer nations to bring that date forward to the middle of next year.
Raab told Reuters he hoped other countries would step up to the plate after Britain started distributing the first tranche of the 100 million shots it plans to give away.

Thursday – Google workers will need to be vaccinated before returning to the office, the US tech giant has said. The policy will begin at its US campuses within weeks and then be rolled out globally for its 144,000 employees. Many firms are weighing up their stances on vaccinations.

The furlough in the UK will be wound down further from Sunday, as the government asks employers to make a bigger contribution to the wage support scheme. An estimated 1.3 million people were on the scheme at the beginning of July, down from a peak of 5.1 million at the height of lockdown in January. The scheme has been extended several times but will end on 30th September.

European stocks hit record highs on Thursday as strong earnings from commodity majors, Airbus and others set a bright tone in markets, while concerns about China’s regulatory moves faded.

MPs on the transport committee are warning that unless charging habits change, or the National Grid is strengthened, the charging needs from millions of new electric vehicles (EVs) will cause blackouts to parts of the country. The report questions whether the Government’s current plans are enough to deliver the public charging infrastructure needed across all regions of the UK and whether it will benefit everyone. Drivers who live in rural or remote areas or who do not have off-street parking, for example, are at risk of being left behind, it says.

U.S. President Joe Biden is expected to announce on Thursday that all civilian federal workers will need to be vaccinated against the coronavirus or face regular testing, social distancing, mask requirements and travel limits, a source familiar with the matter said.

UK Ministers approved plans to reopen the border to foreign travellers yesterday in defiance of official warnings that the move posed a “clear public health risk”.
From next Monday (2nd August), millions of fully vaccinated passengers from the US and EU — which includes countries on the amber list will be able to enter England, Scotland and Wales without spending up to ten days in quarantine. The change is widely expected to be expanded to other countries in the coming months.

Friday - England's chief midwife has stepped up her call for pregnant women to get the Covid jab as soon as possible. Estimates based on GP records and Public Health England data suggest hundreds of thousands have not had the jab, as the number of mums-to-be in hospital with the virus rises.

Some nightclubs in England have begun requiring an NHS Covid pass for entry, amid a demand for MPs to debate their use. NHS Covid passes allow users to show proof of their vaccination, test or immunity status at venues. They are available through England's NHS app, which is separate from the NHS Covid-19 app in England and Wales. The Lib Dems called for ministers to scrap the passes for good or at least allow MPs to debate them in Parliament.

Australia has deployed hundreds of soldiers to Sydney to help enforce a Covid lockdown. A Delta outbreak which began in June has produced nearly 3,000 infections and led to nine deaths. Australian Defence Force soldiers will undergo training on the weekend before beginning unarmed patrols on Monday. But many have questioned whether the military intervention is necessary, calling it heavy-handed.

China has warned the UK's Carrier Strike Group, led by the aircraft carrier HMS Queen Elizabeth not to carry out any "improper acts" as it enters the contested South China Sea. 'The People's Liberation Army Navy is at a high state of combat readiness' says the pro-government Global Times, seen as a mouthpiece for the ruling Chinese Communist Party (CCP).

Dairy giant Arla, which supplies milk to all major UK supermarkets, has said a lorry driver shortage has forced it to cut back on its deliveries. There are indications that the shortage of drivers is pushing up pay rates, with Tesco offering lorry drivers a £1,000 joining bonus.

The US economy is staging a slower recovery than economists expected following a rise in coronavirus cases. The economy grew at an annualised rate of 6.5% in the second quarter, according to official data. While gross domestic product (GDP) was ahead of the first quarter, growth was below forecasts of 8.5%. On the upside, official figures from the US Commerce Department revealed that consumer spending was strong in the second quarter, rising by 11.8%.

The number of empty shops in Britain has continued to rise as retailers struggle with the effects of the Covid pandemic, the British Retail Consortium has said. Shopping centres have been hardest hit, with nearly one in five units empty, the industry group said. The Covid pandemic has accelerated a shift towards online shopping.

US President Joe Biden has called for states to offer $100 (£71) to the newly vaccinated in an effort to address flagging jab rates amid virus surges. The president also issued a strict new vaccine requirement for US federal workers, the nation's largest workforce with some two million people. The order requires employees to show proof of vaccination or be subjected to mandatory testing and masking. Just under half of the US is fully vaccinated, according to official data.

SHANGHAI (Reuters) - Asian shares fell on Friday, extending their biggest monthly drop since the height of global pandemic lockdowns last March on lingering investor concern over regulatory crackdowns in China on the education, property and tech sectors.

Over the week, the main Global Stockmarkets were split, with small rises in the UK and France, offset by small losses in the US and Germany. Chinese stocks were heavily down due to regulatory changes, which also affected the other far east markets. The D-PIMS Portfolios were all in negative territory, with the higher risk Portfolios performing worst, due to their higher percentage holdings in China & Japan. The Portfolios were helped by their diverse allocations.

 

Back