D-PIMS Weekly Market Update - Week of 3rd to 9th February 2020
Today’s Monday Update:
The unfolding Coronavirus was constantly in the news over the last week, but Brexit reporting was still ever present:
• We may have technically left EU on Friday, but that did not stop a new round of rhetoric kicking off on Monday morning, with Prime Minister Boris Johnson insisting he need not sign up to the bloc’s rules and Brussels warning of tariffs and quotas unless he did.
The European Union said it wants an ambitious zero-tariffs and zero-quotas trade deal with Britain, but this will be conditional on open and fair competition between the UK and the remaining 27-nation bloc, the EU’s Brexit negotiator said. Michel Barnier said a free trade agreement must include a deal on fisheries that would give reciprocal assess to waters and conditions on these must be established by July 1, 2020.
• On Tuesday China’s central bank took steps to shore up its economy, helping to ease growing fears about the global impact of the coronavirus outbreak, particularly in the wake of the news that a Cruise ship with 3,700 people aboard was being quarantined for two weeks.
• Wednesday saw figures released that showed the British economy’s post-election bounce gained strength in January, as services companies enjoyed the strongest influx of new orders since mid-2018.
The IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) rose to 53.9 January, up from 50.0 in December. It was the strongest reading since September 2018 and higher than all forecasts in a Reuters poll of economists, which had pointed to a reading of 52.9. Sterling rallied against the Dollar and the Euro after the survey.
Later in the day on Wednesday , there was no surprise that President Donald Trump was acquitted in his U.S. Senate impeachment trial. He was saved by fellow Republicans who rallied to protect him nine months before he asks voters in a deeply divided America to give him a second White House term.
• China said on Thursday that it intends to halve additional tariffs it levied against 1,717 U.S. goods last year, in the next week. This could help improve negotiating conditions for the second phase of a trade deal, after the signing of a Phase 1 agreement between the two countries earlier this year.
• Despite an ever increasing number of Coronavirus infections being reported over the course of the week, global stockmarkets did make bumpy progress. The D-PIMS Portfolios had a good week with some very positive numbers, particularly form the higher risk portfolios.
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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.