Please see below for the latest Blackfinch Group Monday Market Update:
UK COMMENTARY
- Boris Johnson unveiled a three-tier lockdown system to help control the spread of a second wave of infections
- A lack of progress on a Brexit trade agreement saw Johnson suggest that the country should prepare for a ‘no-deal’ outcome
- The three months to the end of August saw Britain’s unemployment rate rise to 4.5%, the Office for National Statistics (ONS) said, versus expectations of 4.3%
- After a record low of 343,000 vacancies in April to June, there has been an estimated quarterly increase to 488,000 vacancies in July to September 2020. Vacancies, however, remain below pre-pandemic levels and are 332,000 less than a year ago.
- The latest grocery market share figures from Kantar for the four weeks to October 4th show that sales growth rose by 10.6%, which is expected to be a result of the threat of another national lockdown. Shoppers spent an additional £261mln on alcohol as the 10pm curfew came into effect and the Eat Out to Help Out scheme concluded.
ONS data suggested that labour productivity, as measured by output per hour, fell 1.8% year-on-year. Output per worker fell by 21.1%, but it is expected that this is a result of the furlough scheme allowing employers to retain workers even though they are working no hours.
US COMMENTARY
- The market continues to wait patiently for any news on a further government stimulus package. However some solace can be taken in the fact that no matter who wins the presidential election next month, there will likely be a sizeable fiscal stimulus package announced.
- Third quarter earnings season started, giving investors much to digest, with the main area of focus being the level of recovery that companies have seen since the depths of the economic fallout from the pandemic
- First time jobless claims increased to 898,000, the consensus forecast had been for a drop to 825,000. Continuing claims fell from 10.98mln to 10.02mln, a greater fall than had been anticipated by the market.
Retail sales rose 1.9%, well ahead of estimates, although industrial production showed a 0.6% decline in September.
ASIA COMMENTARY
- On Tuesday 13th, Hong Kong’s stock market was unexpectedly closed as a tropical storm prompted authorities to shutter businesses and close schools
GLOBAL COMMENTARY
- The International Monetary Fund has upgraded its GDP forecasts for this year. In its latest World Economic Outlook it predicts that global output will fall by 4.4% in 2020, better than the 5.2% slump forecast in June.
- The largest shift was in the prediction for the US, with GDP seen shrinking by 4.3%, not the 8% previously anticipated
- Improvements are also seen in the forecasts for Europe, the UK and China, with the fund saying that these changes are due to a “somewhat less dire” slump in the April-June quarter, and a stronger than expected recovery in July-September
- Emerging markets saw their forecast fall, with a prediction for a 5.7% contraction, worse than the previously suggested 5% slump
The report also suggests that as a result of the pandemic 80-90mln more people will be pushed into extreme poverty globally.
COVID-19 COMMENTARY
- Johnson & Johnson are forced to pause their COVID-19 vaccine trial due to ‘an unexplained illness in a study participant’
Pfizer and BioNTech have indicated that they could file for emergency use authorisation from the US Food and Drug Administration by late November for their jointly developed vaccine.
These articles provide concise well-informed views that cover the whole of the market and are useful to maintain your up to date view of the markets globally.
Please keep reading our blogs regularly to give yourself a holistic and up to date view of the markets.
Keep safe and well,
Paul Green
19/10/2020