Please see below for Blackfinch Asset Management’s latest market commentary:
In the ever-changing world that we live in, we recognise the importance
of regular and current communication. This weekly news update provides
you with a short summary of events around the world which we
hope you will find useful.
Issue 2 | 3rd August, 2020
UK COMMENTARY
- Following the introduction of a two-week quarantine for travellers returning from Spain, Boris Johnson announces that further quarantines are being considered with Belgium, Luxembourg and Croatia the next likely candidates.
- The UK finance ministry extends help to small businesses, announcing that Companies with fewer than 50 employees and a turnover of less than £9mln can now benefit from loans of up to £5mln under the Coronavirus Business Interruption Loan Scheme.
- Data from Nationwide shows that house prices in the UK rose 1.7% in July.
- Boris Johnson confirms that the UK needs to slow the reopening of the economy, delaying the reopening of some leisure businesses, as well as imposing restrictions in some areas of the country to counter a rise in infections.
US COMMENTARY
- Florida and California continue to be the hubs for COVID-19 cases in the US, with both approaching 500,000 total cases, with only 5 countries globally having a higher case number.
- Republicans and Democrats attempt to come to an agreement over a $1 trillion stimulus plan to help bolster the economy. A variety of steps are being proposed including $1,200 payments to most Americans and further funding for schools, businesses and increased testing.
- The Federal Reserve leaves interest rates unchanged, as expected. A post-meeting statement confirms that “Following sharp declines, economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year.”
- Data shows that the US economy contracted at its fastest pace ever in the second quarter of the year, falling 32.9%.
- Donald Trump takes to Twitter to propose a delay to the November Presidential election, claiming that postal voting will make the election ‘inaccurate and fraudulent’.
EUROPE COMMENTARY
- The European Central Bank (ECB) has told banks in the Eurozone to cancel dividends until 2021 and to exercise ‘extreme moderation’ with bonuses.
- The German economy contracts by 10.1% in the second quarter of the year.
- Data for the Eurozone as a whole shows economic contraction of 12.1% in the quarter.
COVID-19 COMMENTARY
- Moderna Therapeutics began the final phase of clinical trials for its COVID-19 vaccine. The US trial, in collaboration with the National Institue of Alergy and Infectious Diseases is reported to involve up to 30,000 people.
- The UK decides not to join an EU scheme to purchase COVID-19 vaccines, instead forming its own deals.
- Following news that the UK had secured 90mln doses of the COVID-19 vaccine being developed by Pfizer and BioNTech, a deal worth £500mln was signed to purchase a further 60mln doses from Sanofi. In addition it is expected that Astrazeneca, in conjunction with the University of Oxford, may make 30mln doses available as early as September.
These articles are useful for breaking down market input into sectors. This facilitates an all-round view of the markets from the experts.
Please keep reading these blogs to keep your own view of the markets up to date.
Keep safe and well.
Paul Green
04/08/2020