D-PIMS Weekly Market Update - Week of 6th to 12th September 2021
Today’s Monday Update:
Over the course of the last week, headlines were mostly economy and Covid related, with some political reports:
• On Monday, the Confederation of British Industry said, Britain must relax its new immigration rules to allow in more foreign workers and ease labour shortages caused by the Coronavirus pandemic and Brexit. The CBI said drivers, welders, butchers and bricklayers should be classed as shortage occupations for immigration purposes. This would allow easier access to visas, but also for the employers sponsoring them to pay salaries below thresholds for migrant workers under Britain's new migration system.
Britain's senior climate change official, Alok Sharma arrived in Tianjin to meet representatives from government and business ahead of the next round of global climate talks scheduled to take place in Glasgow in November. Sharma, President of the COP 26 climate talks, said via Twitter that he was meeting top Chinese climate envoy Xie Zhenhua, to discuss "how we work together" to ensure the November summit is successful. China, the world's biggest emitter of climate-warming greenhouse gas, is coming under pressure to announce more ambitious measures on coal production and consumption.
• Prime Minister Boris Johnson on Tuesday, set out plans to raise taxes by £12 billion pounds a year to try to tackle a backlog in the health system and fix how Britain's adult social care is funded. From April 2022 the government will introduce new 1.25% levies on both earned income and on employers' wage bills to raise funds for health and social care. The levy will be based on National Insurance contributions and will be paid by working adults including - from 2023 - those over state pension age. From April 2022 the government will also raise by 1.25 percentage points the rate of tax paid by individuals who receive dividend income from shares. The government said no one would have to pay more than £86,000 pounds towards the cost of their care over their lifetime.
• The EU's Brexit coordinator said on Wednesday, that the European Union and Britain must resolve problems over Northern Ireland trading using the protocol agreed between them, rejecting a British demand to renegotiate it. European Commission vice-president Maros Sefcovic said on the eve of his first trip to the British province that he was "absolutely convinced" good solutions could be found within the protocol. "Let's focus on the concrete problem. Let's not try to renegotiate the protocol. This is definitely not our aim and I believe that we can find the good solution to the outstanding issues," Sefcovic told a news conference.
• Moderna Inc said on Thursday it was developing a single-dose vaccine that combines a booster dose against COVID-19 and a booster against flu. "Our number one priority as a company right now is to bring to market a Pan-respiratory annual booster vaccine, which we plan to always customize and upgrade," Chief Executive Officer Stéphane Bancel said during Moderna's R&D day.
US President Joe Biden and Chinese leader Xi Jinping spoke for 90 minutes on Thursday, in their first talks in seven months, discussing the need to ensure that competition between the world's two largest economies does not veer into conflict. The U.S. side said the "proof will be in the pudding" as to whether the stalemate can be broken, with ties between the superpowers languishing at their lowest point in decades. Chinese state media said Xi had told Biden that U.S. policy on China imposed "serious difficulties" on relations, but added that both sides agreed to maintain frequent contact and ask working-level teams to step up communications. "China and the United States should ... show strategic courage and insight, and political boldness, and push Sino-U.S. relations back to the right track of stable development as soon as possible," state media said, citing Xi.
Spending on payment cards in Britain rose sharply last week to 99% of its pre-pandemic level, up from 93% in the previous week, the Office for National Statistics said on Thursday. Job adverts listed by online portal Adzuna rose to 128% of their February 2020 level as of 3rd September, up 2% from the previous week, the ONS said.
There's no free lunch in finance - except when banks are wooing workers back to the office. London's financial sector, keen to return to a semblance of normality after the worst of the pandemic, is leading the charge to encourage employees back to their old lives, with some companies even offering free food and social events. It seems to be working; TFL said this week it recorded its busiest day since the pandemic hit in March 2020, as workers filled once-deserted trains into the capital's twin financial districts of the City and Canary Wharf.
• On Friday there were reports that US President Joe Biden took aim at vaccine resistance in America, announcing policies requiring most federal employees to get COVID-19 vaccinations and pushing large employers to have their workers inoculated or tested weekly.
The new measures, which Biden laid out in remarks from the White House, would apply to about two-thirds of all U.S. employees, those who work for businesses with more than 100 workers. "We've been patient," Biden told the tens of millions of Americans who have declined to get Coronavirus shots. "But our patience is wearing thin, and your refusal has cost all of us."
• On Sunday, Health Minister Sajid Javid told the BBC he was not "anticipating any more lockdowns" but would not take the measure off the table, and that the government would not go ahead with vaccine passports to allow people to attend mass events and that he wanted to "get rid of" PCR tests for travellers as soon as possible. Boris Johnson will set out next Tuesday his plans to manage the COVID-19 pandemic in the winter months.
• Over the week, the main Global Stockmarkets were mostly down, except Far Eastern indices. The D-PIMS Portfolios were slightly down, apart from the Very High Risk Portfolio. They were helped by their allocations to Japan and China equities, but also domestic UK equities. The higher risk portfolios benefited from having high allocations to these areas.
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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.