D-PIMS Weekly Market Update - Week of 5th to 11th October 2020
Today’s Monday Update:
Over the course of last week, most headlines were related to the economy or Coronavirus:
• As Britain’s negotiations with the European Union on a post-Brexit trade deal go down to the wire, Prime Minister Boris Johnson said on Monday, the UK could trade with the bloc on similar terms to Australia, if no agreement is reached. But Australia itself is far from happy with its arrangements with the EU and is pushing for the better market access that only a fully-fledged trade deal would bring.
Stocks and oil prices rose on Monday as fiscal stimulus hopes in the U.S. and suggestions Donald Trump’s health was improving brought relief to markets after last week’s rush to safety on uncertainty over the impact of the U.S. president’s COVID-19 infection.
• On Wednesday, a French EU lawmaker who chairs the European Parliament’s fisheries committee told Reuters there could be no annual quota negotiation in a trade deal with Britain, sticking to a tough line from Paris that could make a Brexit deal more difficult.
Britain's COVID-19 testing system faced more disruption on Wednesday after Swiss pharmaceutical giant Roche said problems at a new warehouse had delayed the dispatch of some products at a time case numbers are surging.
Boris Johnson said on Wednesday that COVID-19 infections were rising in London and elsewhere, but that his government’s approach to controlling the spread of the virus was still the right one. ‘“The local and regional approach combined with the national measures remains correct,” Johnson told parliament, when asked why infections continued to rise in areas where local lockdown measures have been put in place.
• Bank of England Governor Andrew Bailey said on Thursday, he believed Britain and the European Union should be able to reach a trade deal, and that he did not expect the new wave of coronavirus cases to be as damaging as the first. British midcap sized shares rose to their highest levels in nearly two months on Thursday following the Bank of England Governor’s upbeat views on Brexit and as a slew of corporate results showed signs of an improvement.
U.S. President Donald Trump’s physician said on Thursday that the President had completed his course of therapy for the coronavirus, had remained stable since returning to the White House, and could return to public engagements on Saturday. Dr Sean Conley said in a memo released by the White House, that Trump had responded “extremely well” to treatment.
• Figures out on Friday, showed Britain’s economy struggled to grow in August, setting back its recovery from the coronavirus lockdown, and finance minister Rishi Sunak announced more help to slow a rise in jobs losses as a second wave of COVID-19 infections hits. The chancellor set out the next stage of the job support scheme, that will aim to protect jobs and provide a safety net for those businesses that may have to close in the coming weeks and months.
• Over the week, the main Global Stockmarkets where well up, although the strengthening Pound had some negative affect on returns from overseas Markets. Hopes of a Brexit deal and U.S. stimulus package eclipsed worries about a fresh surge in COVID-19 cases that risks derailing an economic recovery. All the investment D-PIMS Portfolios were well up, especially the higher risk Portfolios. The Portfolios were helped by some internal currency hedging and 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.