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D-PIMS Weekly Market Update - Week of 9th to 15th January 2023

Today’s Monday update:

Over the course of last week, market moving headlines were mostly related to economic matters:

• On Monday, Britain and the European Union reached a data sharing agreement, in a step towards resolving issues stemming from post-Brexit rules governing trade with Northern Ireland, the two sides said in a joint statement. The agreement was critical to further talks on the trading regulations known as the Northern Ireland Protocol, British foreign minister James Cleverly and European Commission Vice President Maros Sefcovic said after a meeting in London.

An English surfing resort was counting down to the first launch of orbital satellites into space from western Europe on Monday, when Virgin Orbit's mission will transform the Cornish town of Newquay into the country's first spaceport. A modified Boeing 747 with a rocket under its wing is set to take off from Newquay on Monday evening, watched by crowds across the runway, before soaring out over the Atlantic where after an hour it will release a rocket at about 35,000 feet.

• On Tuesday, Britain's hopes of becoming a leading destination for the launch of small satellites remain intact despite the failure of the first mission, the country's business minister Grant Shapps said. Hours after the plan to launch nine satellites ended when Virgin Orbit's rocket suffered an anomaly which prevented it from reaching orbit, Shapps said another attempt would follow.

Companies including GM, Ford, Google and solar energy producers said on Tuesday they would work together to establish standards for scaling up the use of virtual power plants (VPPs), systems for easing loads on electricity grids when supply is short. Virtual power plants pool together thousands of decentralized energy resources like electric vehicles or electric heaters controlled by smart thermostats. VPPs are positioned for explosive growth in the United States, where the 2021 Inflation Reduction Act has created or enlarged tax incentives for electric cars, electric water heaters, solar panels and other devices whose output and consumption can be coordinated to smooth grid load.

• On Wednesday, British Prime Minister Rishi Sunak and his Japanese counterpart Fumio Kishida signed a defence agreement in London that will allow the countries to deploy forces on each other's soil, the latest move towards closer security ties. Kishida was visiting Britain as part of a tour of Group of Seven (G7) countries including France, Italy, Canada and the United States. Japan currently holds the G7 presidency. Sunak and Kishida were also expected to discuss trade and Britain's accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

• On Thursday, U.S consumer prices fell for the first time in more than 2-1/2 years in December amid declining prices for gasoline and motor vehicles, offering hope that inflation was now on a sustained downward trend, though the labour market remains tight. The consumer price index dipped 0.1% last month, the first decline since May 2020, when the economy was reeling from the first wave of COVID-19 cases. Economists polled by Reuters had forecast the CPI unchanged.

• On Friday, Britain's economy unexpectedly eked out some modest growth in November after a boost from World Cup drinkers and video game sales, reducing the chance that it has already slipped into recession, despite a gloomy broader picture for 2023. Gross domestic product rose 0.1% in November from October, figures from the Office for National Statistics showed on Friday, stronger than the average forecast for a fall of 0.2% in a Reuters poll of economists.

• Over the week, the main global stock markets were mostly up, although Japan was a little down. China and Hong Kong were up the most, on the back of the continuing relaxation of Covid curbs. Over the week, all the D-PIMS portfolios were well up for the second consecutive week, especially the higher risk portfolios. The portfolios were helped by their Commodity and some domestic UK holdings.


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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.