D-PIMS Weekly Market Update - Week of 6th to 12th July 2020
Today’s Monday Update:
Over the last week, most news was either Coronavirus or economic related:
• Growth returned to British construction companies in June for the first time since the coronavirus lockdown began, albeit from low levels, a business survey showed on Monday.
The IHS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) rebounded to 55.3 from 28.9 in May, its highest since July 2018 and well above the 50 threshold for growth.
Data company IHS Markit said growth was driven mostly by housebuilders, but commercial and civil engineering construction companies also reported an increase in activity. The all-sector PMI - which combines the services, manufacturing and construction sectors - rose to 48.3 in June from 29.9 in May.
Britain will invest around £1.6 billion in the arts and hopes to allow outdoor and socially distanced performances at cultural venues, as it tries to help a high-profile sector hit hard by the coronavirus. Spanning theatres in London’s West End, opera houses and ballet companies putting on big-budget performances to provincial venues up and down the country, the industry is a prominent British export and popular among tourists.
• On Tuesday lockdown measures were reimposed in Australia’s second biggest city, confining Melbourne residents to their homes for six weeks unless undertaking essential business, as officials scramble to contain a coronavirus outbreak. The decision, which affects around 4.9 million people, was announced just hours before the busy border between Victoria, of which Melbourne is the capital, and New South Wales was scheduled to close for the first time in a century.
From midnight on Wednesday, everyone in Melbourne was required to stay home unless travelling to work, studying, shopping for food or attending medical appointments. Restaurants, cafes and bars will be able to provide takeaway service only, gyms and hair salons closed, household gatherings limited to two people and the current school vacation extended.
Victoria Premier Daniel Andrews said the restrictions were onerous but necessary. “I would, with the greatest of respect, put it to you that getting this virus and dying from it is very onerous too,” he said during a televised media conference. “We have to be clear with each other that this is not over,” Andrews said. “And pretending that it is because we all want it to be over is not the answer. It is indeed part of the problem. A very big part of the problem.”
Victoria was responsible for 191 of the 199 new cases reported nationally on Tuesday, the biggest one-day rise since early April. The spike has worried officials, even though the national total of almost 8,800 cases and 106 deaths is far below many other countries.
Top British and EU negotiators dined at Number 10 Downing Street on Tuesday, kicking off the latest round of Brexit talks that have all but stalled amid differences, with the top EU official saying he wants an agreement, “but not at any price”.
• The Chancelor Rishi Sunak announced a £30 billion plan to head off an unemployment crisis by paying employers to bring back their furloughed workers and cutting taxes for the hospitality sector and homebuyers. Under the plan — part of a broader programme of measures — employers would be paid £1,000 for every worker who returns to their job after the furlough scheme expires at the end of October.
Sunak’s plan also includes a £2 billion fund to create six-month work placement jobs for unemployed 16-24 year-olds and the largest ever rise in partly government-funded apprenticeships. A further £3 billion will be spent on improving the energy efficiency of homes and public buildings, which would support more than 100,000 jobs. He also raised a threshold for a tax on property purchases to £500,000 pounds, four times its current level, with immediate effect until March 31 to help breathe life into the housing market and the broader economy.
• Over the week, the main Global Stockmarket indices were generally flat or down. The investment D-PIMS Portfolios were mainly a little down over the week. They were helped by their diverse exposure.
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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.