D-PIMS Weekly Market Update - Week of 31st August to 6th September 2020
Today’s Monday Update:
Over the course of last week, most news was focused on either the economy or the Coronavirus:
• Facebook said on Tuesday, that a Russian influence operation posed as an independent news outlet to target left-wing voters in the United States and Britain, including by recruiting freelance journalists to write about domestic politics.
Sanofi is halting clinical trials of its Kevzara drug after tests proved inconclusive. According to a statement released by the French pharmaceutical company, the Phase 3 test “did not meet the primary or secondary evaluation criteria compared with a placebo, and in both cases, compared with established hospital care. Sanofi global research head Dr. John Reed said that ”Kevzara did not give us the results we were hoping for”.
• A European Central Bank official said on Wednesday, that detailed analysis is needed before the European Union can decide on long-term access for the London Stock Exchange (LSE) to clear euro denominated derivatives for customers in the bloc. The LSE dominates euro derivatives clearing and EU policymakers have called for the activity to be relocated to the bloc, given that Britain will no longer have to comply with EU rules after December 31, when a post-Brexit transition period ends. The EU’s executive, the European Commission, has said it will grant Britain “time limited” clearing access from January, to allow the bloc to build up its own euro clearing capacity and avoid disrupting markets.
British house prices leapt to hit an all-time high in August, mortgage lender Nationwide said on Wednesday, adding to signs of a sharp rebound in the country’s housing market after the coronavirus lockdown. Prices jumped by 2.0% from July, the biggest month-on-month increase since 2004 and far outstripping the median forecast for an increase of 0.5% in a Reuters poll of economists. Nationwide said prices were 3.7% higher than a year earlier. “House prices have now reversed the losses recorded in May and June and are at a new all-time high,” Robert Gardner, Nationwide’s chief economist, said.
• Britain on Thursday said it was investing £500 million to develop rapid COVID-19 tests, with a view to soon rolling out widespread, systematic testing to pick up outbreaks early, amid criticism over backlogs in its current testing system. Health minister Matt Hancock has said he hopes mass testing using faster COVID-19 tests can be rolled out towards the end of the year, adding that they are key to restoring freedoms after months of COVID-19 restrictions. “I want to solve the problem by having the next generation tests at a radically bigger scale. You can’t do that on the current technology very easily,” he told BBC television. The funding will be used to expand existing trials of saliva tests and a rapid 20-minute test in southern England, while a new, community trial in Salford, northwest England, will assess the benefit of population-testing, under which people are regularly tested regardless of whether they have symptoms, so that any cases can be picked up before they have spread widely.
Amazon will create a further 7,000 permanent jobs across the United Kingdom in 2020, taking total new jobs this year to 10,000, it said on Thursday. The U.S. internet giant said the new jobs would be in over 50 sites, including corporate offices and two new fulfilment centres in the north east and central England.
• Major airlines want the U.S. and British governments to launch a passenger testing trial for the coronavirus, for flights between London and New York, to pave the way for a resumption of more international travel. The chief executives of Airlines for America, Airlines UK, Heathrow Airport and Virgin Atlantic Airways said both governments should “establish passenger testing solutions in air travel. “We believe that in the immediate absence of a vaccine, testing of passengers in aviation provides the best and most effective frontline defence.” They urged the governments to establish a testing trial between New York and London by month’s end “to gather real world evidence and data.”
• Britain is “absolutely confident” it will keep supply chains moving regardless of the outcome of negotiations with the European Union on a future trade agreement post Brexit, transport minister Grant Shapps said on Friday. Shapps was responding to a warning from Britain’s customs and logistics associations, that the country’s Brexit border preparations were inadequate and risk causing disruption to supply chains next year. He said Britain’s supply chains had been under record pressure during the coronavirus pandemic but had responded well. “We’ve kept the supply chains going and I’m absolutely confident we’ll do that again in the future going forward,” he told BBC radio.
• Over the week, the main Global Stockmarket indices were down, apart from Japan’s Nikkei, particularly after taking the £’s appreciation into account. The investment D-PIMS lower risk Portfolios were up, but the higher risk portfolios were down. The Portfolios were generally helped by their diverse exposure.
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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.