D-PIMS Weekly Market Update - Week of 28th June to 4th July 2021
Today’s Monday Update:
Over the course of the last week, headlines were mostly Coronavirus and economic related:
• A third shot of the Oxford-AstraZeneca COVID-19 vaccine produces a strong immune response, researchers said on Monday, adding there was not yet evidence that such shots were needed, especially given shortages in some countries. The Oxford University study found that a third dose of the vaccine increases antibody and T-cell immune responses, while the second dose can be delayed up to 45 weeks and also lead to an enhanced immune response. The British government has said it is looking at plans for an autumn vaccine booster campaign.
• One in every nine new cars sold in Europe last year was an electric or plug-in hybrid vehicle, with low-emission car sales surging even as the COVID-19 pandemic knocked overall vehicle sales, the European Environment Agency said on Tuesday. The uptick in electric car sales caused a 12% drop in average CO2 emissions of new cars sold in Europe last year, compared with in 2019, reversing a trend that had seen such emissions increase for three consecutive years. It was the biggest annual drop in such emissions since the EU introduced its car CO2 standards in 2010.
• Australian officials extended lockdown and social distancing measures to more of the country on Wednesday, with four major cities already under a hard lockdown in a race to contain an outbreak of the highly contagious Delta coronavirus variant. Around one in two Australians are under stay-at-home orders, with millions of others subjected to movement curbs and mandatory mask-wearing amid COVID-19 flare-ups in several locations. With more than five million residents of greater Sydney under a two-week lockdown until July 9, New South Wales state reported 22 new locally transmitted COVID-19 cases on Wednesday, all linked to prior infections.
Britain said it wanted to help businesses to access state aid with a new and more flexible subsidy system, and that leaving the European Union would allow it to support domestic priorities like building green industry. The new system, which has previously been outlined by ministers, was set out in legislation for the first time on Wednesday.
The ADP National Employment Report on Wednesday, showed that U.S. private payrolls increased more than expected in June as companies rushed to boost production and services amid a rapidly reopening economy, though a shortage of willing workers continues to hang over the labour market recovery.
• Nissan Motor Co bet on Britain to supercharge its European electric future on Thursday, pledging £1 billion with its Chinese partner, to build a giant battery plant that will power 100,000 vehicles a year including a new crossover model. Facing the most profound technological shift in a century, the titans of the auto industry are racing to secure battery supply close to the factories where they will make the new cleaner electric vehicles of the future. The venture will create 6,200 jobs at the Sunderland plant and in British supply chains.
Britain unveiled its blueprint on Thursday, for building the world's "most advanced" financial sector, after Brexit largely severed the City of London financial district from the European Union, its biggest export customer. Finance minister Rishi Sunak set out his "ambitious vision" for Britain's largest tax-raising industry in his first Mansion House speech. Britain is set to secure an exemption for financial services from a new global tax system which was agreed by the Group of Seven economies to squeeze more money out of multinationals like Google.
Prime Minister Boris Johnson said on Thursday he was confident Britons fully vaccinated against COVID-19 would be able to travel abroad this year. The government has said it will this month set out details of plans to allow those who have had both COVID-19 vaccine shots to avoid self-isolation on return from top tourist destinations such as Spain and France.
At least two dozen U.S. energy firms, including Dominion Energy Inc and Sempra Energy, have started producing hydrogen or testing its viability in natural gas pipes to take advantage of existing infrastructure as the world prioritizes lower-carbon fuels. Nations worldwide are trying to reach net-zero carbon emissions by 2050, but that will rely heavily on technology - like hydrogen - that is in developmental stages. Utilities have a potential advantage if they find that clean-burning hydrogen can be successfully transported in existing gas pipes and power plants.
Global mergers and acquisitions (M&A) activity broke records for a second consecutive quarter this year as companies continued to borrow cheaply and spend their cash reserves on transformative deals to reposition themselves for the post-COVID world. Deals worth $1.5 trillion were announced in the three months to 30th June, more than any second quarter on record and up 13% from the record first quarter of the year, Refinitiv data shows.
• Over the week, the main Global Stockmarkets were mixed with some up and some down. The US and UK were amongst the better performers. The investment D-PIMS Portfolios were all well into positive territory for the week, particularly the higher risk Portfolios. The Portfolios were helped by their diverse 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.