D-PIMS Weekly Market Update - Week of 2nd to 8th March 2020
Today’s Monday Update:
Over the last week most of the headlines were full of Coronavirus developments (again), and its continuing spread beyond China:
• Last Monday saw Global Stockmarkets staging a rally on hope of monetary and fiscal stimulus being forthcoming from Central Banks and Governments.
• Despite more outbreaks of the Coronavirus outside in China, Global Stocks and oil prices extended gains on Tuesday as policymakers indicated their willingness to help ease the economic fallout from the Coronavirus. Finance ministers from the group of seven (G7) and central bank governors held a conference call on Tuesday (1200GMT) to discuss measures to deal with the outbreak.
• The number of new cases in China fell to a far lower level than elsewhere in the world. World Health Organisation (WHO) chief Tedros Adhanom Ghebreyesus said almost eight times as many cases had been reported outside of China as inside, in the previous 24 hours and Chinese cities have started testing people traveling to China for fear of reigniting the crisis from overseas infections.
• Later in the day the US Fed took the Markets by surprise when they suddenly announced an emergency 0.5% cut in interest rates down to 1.25%, in response to the economic threat posed by the Coronavirus. They were not due to meet until 16 & 17th March. Even though Markets had been rallying strongly on the hope of stimulus from authorities, this surprise move was taken as a sign of panic and halted the rally.
• Overnight the “Super Tuesday” Democratic nominee election results came out and the moderate, Joe Biden (Barack Obama’s former Vice President) took ten of the fourteen states being contested, with the far left candidate, Bernie Sanders taking four. Markets took well to this, as the fear of a far left Democratic nominee seemed to reduce.
• Markets declined later in the week as fears grew about the economic impact of spreading Coronavirus. Over the week Markets were down overall, but the lower risk D-PIMS Portfolios were slightly up to slightly down. Of course the higher risk portfolios were down the most.
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.