Please see below for this week’s market update received from Blackfinch Asset Management earlier today:
UK COMMENTARY
- UK Gross Domestic Product (GDP) falls by a record 20.4% in the second quarter of the year, the biggest fall of any G7 country, although the timing of lockdown measures being implemented means that fair comparisons are difficult.
- The number of unemployed people in the UK has risen by 730,000 since lockdown, and increase of 94,400 in July. The Office for National Statistics (ONS) estimates that a further 7.5mln are still temporarily away from offices and factories, presumably as a results of the furlough scheme.
- Survey data from the ONS shows that 29% of businesses currently trading said their operating costs were exceeding or were equal to their turnover.
- The British Retail Consortium figures show that year-over-year growth in total retail sales declined only marginally from 3.4% in June to 3.2% in July.
- Chief Brexit Negotiator, David Frost, states that a deal with the EU could be reached in September.
US COMMENTARY
- As the next stage of a fiscal deal once again stalls in Congress, Donald Trump takes matters in to his own hands, as he had signalled he would, by passing a number of executive orders.
- Payroll taxes for workers who earn c.$100,000 or less will be halted between 1st September and 31st December.
- Emergency federal unemployment benefits are reinstated at $400, down from the $600 payments that lapsed at the end of July and interest on student loans is being waived until the end of the year.
- Consideration is also being given to halting evictions and a cut to capital gains tax.
- First-time jobless claims declined to 963,000 from 1.19mln the previous week. This is the first time since March that new claims were below one million.
- Retail sales rose by 1.2% in July, following an 8.4% increase in June. Whilst this was below expectations of 2%, the June figure was revised upwards from 7.3%.
ASIA COMMENTARY
- The US imposes sanctions on 11 Beijing and Hong Kong officials after the imposition of new national security laws in Hong Kong
- Retail sales and industrial production in China suggest that the recovery is still weak. Data shows a seventh straight monthly decline in retail sales, and industrial production increasing by 4.8%, below market expectations.
COVID-19 COMMENTARY
- Russia declare that they have approved an effective vaccine against COVID-19, with President Putin announcing that his daughter has already been inoculated.
- Moderna Inc secures a $1.5bn order from the US government for 100mln doses of its COVID-19 vaccine that is currently undergoing phase III clinical trials. Donald Trump announces that the order also provides an option to purchase a further 400mln doses.
- The US also strikes a purchase deal with Pfizer Inc for its vaccine, at a cost of $2bn.
These weekly updates from Blackfinch (one of the investment managers we use) give you a good bullet point update which provides you with a short summary of events from around the world over the past week.
These quick read updates are a good way of keeping up to speed with developments both politically and in the markets.
Please check back for our regular market updates from a wide range of different providers from across the industry.
Andrew Lloyd
17th August 2020