D-PIMS Weekly Market Update - Week of 8th to 14th June 2020
Today’s Monday Update:
Over the last week, most news was either Coronavirus or economic related:
• On Monday it was reported that the government is considering giving drivers up to £6,000 to swap their diesel and petrol cars for electric vehicles. Due for announcement in July, the new car scrappage scheme, is designed to provide a shot in the arm for UK electric car manufacturing following the impact of the coronavirus lockdown.
The number of people in the UK dying of Covid-19 hit it’s lowest level since the start of the Lockdown. In a modelling study of the lockdown impact on 11 nations, Imperial College London scientists said the draconian steps, imposed mostly in March, had “a substantial effect” and helped bring the infection’s reproductive rate below one by early May. A second study by scientists in the United States, published alongside the Imperial-led one, estimated that anti-contagion lockdown policies implemented in China, South Korea, Italy, Iran, France and the United States prevented or delayed around 530 million COVID-19 cases.
• Japan and the United Kingdom agreed to start negotiations for a swift agreement on an economic partnership to secure business continuity for both nations, Japan’s foreign ministry said on Tuesday.
• Two drugs used to treat inflammatory diseases and cancer are being tested as potential therapies for patients with COVID-19, the Universities of Birmingham and Oxford announced on Wednesday. Ben Fisher, trial co-clinical investigator from the University of Birmingham said “In the study we hope to show that with a single dose of these kinds of drugs in hospitalised patients, we are able to delay or prevent a rapid deterioration into intensive care and requirement for invasive ventilation.”
Late on Wednesday the US Federal Reserve said that interest rates are to stay very low for the foreseeable future and quantitative easing is to remain at least at the current pace. However, this was predicated on a bleak US economic outlook. Although Markets liked the former part of the Fed’s address, they did not like the latter.
• On Thursday in was announce that high-level talks between Britain and the European Union involving the Prime Minister and Commission President Ursula von der Leyen will take place on 15th June.
• On Friday it emerged that the United Kingdom has abandoned its plan to introduce full border checks with the European Union on 1st January 2021. Instead, Britain will introduce a temporary “light-touch regime” at ports such as Dover for incoming EU goods. This could happen whether or not there is a Brexit free trade agreement with the EU. Traders importing standard goods would need to keep sufficient records, but would have up to six months to complete customs declarations and pay any tariffs due.
• Over the week, the main Global Stockmarket indices were well down, after a strong run upwards in recent weeks. This was mainly driven by a weak economic outlook from the US Federal Reserve and Market fears of a ‘Second Wave’ of Coronavirus infections. Inevitably, the D-PIMS Portfolios were down, although the lower risk portfolios less so. These were helped by the recent risk reductions that we carried out.
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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.