D-PIMS Weekly Market Update - Week of 30th August to 5th September 2021
Today’s Monday Update:
Over the course of the last week, shortened by the Bank Holiday, headlines were mostly economy related:
• British businesses grew at the fastest rate since May 2014 during the three months to August as COVID-19 restrictions were lifted, the Confederation of British Industry said on Wednesday.
The CBI said its monthly growth indicators, based on business surveys it conducted between 27th July and 17th August, rose to +34 from July's +33, driven by stronger growth in consumer services and retail.
However, manufacturing activity slowed, and most businesses expect a slower pace of growth over the next three months, in part due to supply-chain difficulties and a lack of workers.
Royal Dutch Shell on Wednesday announced plans to vastly expand its network of electric vehicle charging points in Britain, aiming to install 50,000 on-street posts by 2025. Shell will implement the plans through Ubitricity, an on-street charging point company that it acquired in February which operates around 3,600 chargers in Britain. The expansion is part of a government-backed push to rapidly grow Britain's electric vehicle (EV) fleet in line with a target to reduce carbon emissions to net zero by 2050. Britain also plans to ban the sale of new petrol and diesel cars by 2030. According to a recent government report, between 280,000 and 480,000 charging points will be needed in Britain by 2030, compared with today's 25,000 spots. To support its charging point expansion in Britain, Shell plans to help local authorities finance their installation.
Member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) agreed to hold within a month, a first meeting with Britain to discuss its inclusion in the trade deal, Japan's economy minister said on Wednesday. The trade pact removes 95% of tariffs between its members: Japan, Canada, Australia, Vietnam, New Zealand, Singapore, Mexico, Peru, Brunei, Chile and Malaysia.
Former HSBC chief executive John Flint will become the first head of a new state bank designed to promote infrastructure investment, Britain's finance ministry said on Wednesday. The government-owned UK Infrastructure Bank opened in June with £12 billion pounds of capital and £10 billion pounds of government guarantees, and is intended to support investment in renewable energy, transport, digital infrastructure and water utilities. "This is an important milestone for the Bank in its efforts to tackle climate change and level up, while creating new opportunities across the UK," finance minister Rishi Sunak said.
• Figures out on Thursday, showed that the number of shoppers hitting Britain's high streets, shopping centres and retail parks continued to improve in August, with the gap on the same month in 2019 reducing to -18.6% from -24.2% in July, footfall data compiled by Springboard showed. Footfall in central London, which has been hit by an absence of foreign tourists and a reduced numbers of commuters, was 38% below the 2019 level, Springboard said on Thursday, considerably better than -50.4% recorded in July.
British Foreign Secretary Dominic Raab on Thursday, said there is a need to engage with the Taliban on Afghanistan, but Britain has no immediate plans to recognise their government. Raab was speaking in Qatar after meeting the Qatari foreign minister. Raab said they had discussed ensuring Afghanistan does not harbour terrorism in the future, preventing a humanitarian crisis, preserving regional stability and holding the Taliban to account on their commitment to a more inclusive government.
• Australia has secured 4 million doses of Pfizer COVID-19 vaccines in a swap deal with Britain, Prime Minister Scott Morrison said on Friday, as he looks to convince states and territories to stick to a national COVID-19 reopening plan. All the extra doses should reach Australia this month doubling the available Pfizer supply for September, Morrison said, speeding up the country's efforts to come out of economically-damaging coronavirus lockdowns. "The plane is on the tarmac now. It will be leaving tomorrow ... this will enable us to bring forward significantly the opportunity for Australia to open up again," Morrison told reporters in Canberra on Friday.
Britain on Friday appointed a syndicate of investment banks to sell its first green government bond in the week of 20th September. Barclays, BNP Paribas, Citi, Deutsche Bank, HSBC and JPMorgan will act jointly as bookrunners for the sale of the 2033 green gilt, the Debt Management Office said in a statement.
The European Commission has ended an acrimonious court dispute with AstraZeneca over delayed Covid-19 vaccines, dropping an attempt to levy billions of euros in penalties on the UK drugmaker. Under the settlement, AstraZeneca will have until the end of the first quarter of 2022 to finish its deliveries to the EU, after missing a deadline to deliver the doses by the end of June. The FTSE 100's most valuable group had been due to attend court hearings at the end of the month over its delayed delivery of Covid vaccines to the EU, but said its agreement had ended those legal proceedings.
The U.S. economy created the fewest jobs in seven months in August as hiring in the leisure and hospitality sector stalled amid a resurgence in COVID-19 infections, which weighed on demand at restaurants and other food places. However, other details of the Labour Department's closely watched employment report on Friday were fairly strong, with the unemployment rate falling to a 17-month low of 5.2% and July job growth revised sharply higher. Wages increased a solid 0.6% and fewer people were experiencing long spells of unemployment.
• Over the week, the main Global Stockmarkets were mostly up, especially in the Far East. All the D-PIMS Portfolios were up, especially the higher risk Portfolios which saw strong gains, in a week when the FTSE 100 Index was flat. They were helped by their Japan and domestic UK exposures.
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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.