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D-PIMS Weekly Market Update - Week of 27th April to 3rd May 2020

Today’s Monday Update:

Over the last week, most news was once again Coronavirus related:

• On Monday Italy’s Prime Minister announced that they will begin to ease restrictions starting 4th May, after Europe’s longest lockdown. Lifting will be in stages between then and 1st June, which is when bars and restaurants are due to open. Schools will not open until September.

German carmaking giant Volkswagen resumed production at its biggest factory on Monday, as part of a broader industry drive to get back to work in Europe. Germany eased lockdown rules and automakers are relying on the country’s ability to trace and contain new coronavirus cases to safely restore operations in Europe’s largest economy. Fiat Chrysler restarted Italian production at its plant in Atessa, and begun preparatory re-opening work at another four Italian plants. The United Auto Workers union cast doubt on plans by U.S. carmakers to resume production in early May, citing concerns about worker safety.

Carmakers have overhauled production methods to try to reassure workers about the safety of returning to the production line.

Also on Monday, British Cabinet Office minister Michael Gove said talks to strike a deal on a post-Brexit relationship between Britain and the European Union can still be concluded within the agreed timescale. This was despite the EU’s chief negotiator Michel Barnier, previously saying that discussions had made little progress so far.

• Tuesday saw Spain set to announce a regional roadmap for lockdown easing. It outlined how regions can begin phasing out one of Europe’s toughest lockdowns as the daily death toll from the coronavirus fell to 301. Since March 14, most Spaniards have only been allowed out for grocery shopping or to go to the doctor, with the shutdown nearly paralysing the economy and the labour market. Children across Spain were allowed an hour a day outside from Sunday and adult exercise will be permitted from the following Saturday, if the death toll continues to fall.

Meanwhile, Germany’s coronavirus infection rate has edged up from earlier in the month of April and people have been told they should to stay at home as much as they can despite a lockdown relaxation the previous week.

• The main market-moving announcement on Wednesday regarded Gilead’s remdesivir antiviral drug, with the Director of the National Institute of Allergy and Infectious Diseases in the US - Dr Anthony Fauci, saying that results from a US government trial were highly significant and that it will now be the standard of care. Dr. Fauci called the results “very optimistic”, with shorter recovery times, but nothing statistically significant in terms of fatality rates. The US Food and Drug Administration said it has been in discussions with Gilead about making the drug available as quickly as possible. Headlines on this drug have been mixed in recent weeks and Dr Fauci also cautioned that the latest data still needs to be analysed.

• Thursday saw Nissan announce it will restart phased production in early June at its Sunderland factory, Britain’s biggest car plant. The plant, which made just under 350,000 vehicles last year and builds the Qashqai, Juke and Leaf models, has had output suspended since March 17.

BMW’s Rolls-Royce looked set to be the first British car factory to resume output, with a start date of May 4. Their Chief Executive Torsten Mueller-Oetvoes said they are receiving orders from their customers and are heeding the British government’s call to resume production and support the British economy.

Aston Martin, Bentley and Britain’s biggest carmaker, Jaguar Land Rover are also due to resume some production in May.

• On Friday sentiment was dented by U.S. President Donald Trump’s threat to impose new tariffs on China over the coronavirus crisis.

Britain revealed that it had exceeded its daily target of 100,000 COVID-19 tests (total of 122,347 over the previous 24 hours) on Friday. Housing minister Robert Jenrick said “It’s an important stepping stone. We’ve now built the beginnings of the network that we’ll need of testing, tracking and tracing for the next phase of fighting the virus.”

A manufacturer of a possible COVID-19 vaccine being developed by British scientists said on Friday, it may know by the end of May if it can make a million doses a month with a view to building stocks for commercial supply when the vaccine is approved. Cobra Biologics is one of the firms working to make a potential vaccine known as ChAdOx1 nCoV-19, being developed by scientists at the University of Oxford.

Meanwhile in Paris, President Emmanuel Macron warned on Friday that the end of the national lockdown on May 11 would only be a first step as France looks to move out of the crisis created by the outbreak of the coronavirus. He said “May 11 will not be the passage to normal life, there will be several phases and May 11 will be one of them.”

• Over the week the main Global Stockmarket indices were mixed with some up and some down. All the D-PIMS Portfolios were in positive territory.


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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.