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Aviva – Remote Control – Take control of your wellbeing in remote working environments

Please see article below from Aviva which is a guide to taking control of your wellbeing in remote working environments – received 02/09/2020.

Remote Control – Take control of your wellbeing in remote working environments

This short guide gives practical advice, helpful guidance and support to anyone working remotely during the coronavirus pandemic.

‘Social interaction increases the spread of the coronavirus pandemic as it passes from person to person, by touch and through droplets in the air. Social distancing can dramatically slow the spread. That’s why working remotely for many businesses has become essential, in locations that are very different from normal working environments.

Staying in control, maintaining your mental and physical wellbeing can be a high challenge in these extraordinary circumstances. That’s why we’ve published this easy-to-read guide of practical tips and guidance. Life is difficult enough right now, so we’ve kept things as light and breezy as they can be. Stay safe, stay healthy and stay connected. We’ll get through this together’

Dr Doug Wright, Medical Director, Aviva UK Health and Protection

Mental Wellbeing – Some Top Tips

Stay connected and keep talking

The key message is: don’t suffer in silence. The more open everyone is about their mental health – whether they’re doing ok or struggling a bit – the better things will become. One of the most important things you can do at times like this is to talk to people and share how you are feeling. Connect with your colleagues or your manager (and if you’re a manager, don’t forget this applies to you too) and explain how changes, work allocation or the situation is making you feel.

Use wellbeing apps

There are many apps you can use to support your mental wellbeing, to help with mindfulness, meditation and overall mental wellbeing.

It’s essential to select the best app for the task, and that’s where NHS Digital steps in. Although health apps are not supplied by the NHS, it’s widely accepted that the NHS Digital’s Apps Library is the ‘go to’ place for reliable, objective information. It’s here you’ll find trusted mental health and wellbeing apps that have been assessed using rigorous standards. And when an app is improved or modified, it is reassessed.

Change where you work in your home

Don’t work with your laptop facing a blank wall! Your connection with the outside world begins with what you can see outside, just above your screen. It might be a back garden, it could be rooftops, it might be a not-so-busy street, but it’s your physical window on the world. So where do you work in your home? Each home is different, but what you should look for is known as a ‘command position’ that puts you in control. It’s a concept from Feng Shui, the ancient philosophy of living in harmony with your immediate environment. Basically, choose a position in the room that you work in that is furthest from the door and that also enables you to look out of a window. You’ll feel better for it. And in a time of crisis, empowerment starts here. Try it!

Control your intake of negative news

Your home is your castle. And as you work from home, you might feel as if its walls are under siege conditions. With social media and new technology enabling a 24/7 news feed, we’re experiencing constant updates on coronavirus. While some information is useful, too much immersion to this type of news can fuel alarm and tension. As we piece together the progress of COVID-19, the result of being plugged-in to a relentless news cycle can generate negativity, fear and anxiety. In short, if you feel bad about being isolated, the news will make you feel worse.

There’s a simple answer to this: prioritise your mental health and switch off. A bombardment of negative news needs a cut-off point, and you can limit your input just as you’d do for children and screen time. Rolling news isn’t necessarily the most accurate. Take a deep breath and catch up with it tomorrow when the facts are known.

Physical Wellbeing – Some Top Tips

Keep in shape as best you can

Whether you are physically distancing yourself from others, and/or in self-quarantine, you still need to maintain your physical wellbeing. You might not be able to go to your usual classes, gym or exercise activity, but don’t stop all kinds of exercise.

Do something different to get the heart rate going – it could be a skipping rope session, football kick-about or star jumps in the garden or back yard, or inside if you can’t go outside. Go for a walk or a run around the block (not getting too close to anyone else). Fresh air is still very important.

Why not use YouTube or those old exercise DVDs to do a workout? Remember the Wii Fit or Dance Mat? Is it gathering dust in the back of a wardrobe somewhere?

How the pandemic might affect your sleep and how to stay in control.

Have you been having broken or disrupted sleep? Vivid dreams or nightmares?

It’s understandable and you’re not alone.

With such unexpected, unprecedented changes, how you sleep is so incredibly important. It plays a critical role in your physical health and an effective functioning immune system. Quality sleep is also a huge contributor in emotional responses, physical and mental health, helping deter the onset of stress, depression, or anxiety. Whether you’ve had sleeping problems before COVID-19 or if they’ve only come on recently, there are steps that you can take to try to improve your sleep.

Team working at a distance

You can’t support the wellbeing of others if you don’t look after yourself To stay well, you need to consider your physical, mental, financial and social wellbeing – and there’s lots of support and advice available for everyone. Take a proper lunch break, get outside if you can (keeping your distance from others), practice mindfulness and make digital connections via social media and video chats. By doing these things to support your own wellbeing, and telling your colleagues about them, it can support everyone’s wellbeing.

Don’t let the fact that you and your team might be working remotely mean that it creates an ‘always on’ culture. Create working times to suit you and your colleagues, and stick to them. Perhaps create a routine that symbolises the end of your working day. Rest and recharging (physically and mentally) is really important to your wellbeing. If you are a manager and supporting your team, then you need to look after yourself too, giving yourself time to deal with the issues you yourself are facing.

How to lead virtual meetings

Establish virtual meeting principles with your team

• Does every meeting need an agenda?
• How often do we meet and when?
• How do we hear the voices of everyone?

Create a safe environment

By creating a few ground rules on how we interact with one another, such as not interrupting each other, accepting all ideas equally and not being judged, ‘out of the box’ suggestions are encouraged and listened to. Be a brilliant virtual meeting host

• Try and get familiar with the technology you are using.
• Bring energy and purpose to your gatherings, be ready to be flexible and adapt to the needs of the participants.
• Try and be the first in the room so you can meet and greet your participants.
• Consider adjusting start times to allow for things like comfort breaks and give the host space to be prepared and ready to go.

Keep the participants engaged

• Avoid the temptation to dive straight into business, a few moments of friendly chat before a meeting lightens the mood and strengthens the bonds of the group.
• Embrace check in’s and check out’s. Encourage everyone to contribute from the start.
• Listen out for the silence. Some characters are naturally more vocal and confident in these conditions than others. Invite contributions so everyone gets a say.
• Consider catching up 1-1 with anyone who appears to be struggling to contribute and establish a way that works for them and allows them to maintain a sense of belonging.

Following on from the Aviva – Looking after your mental health and wellbeing blog we posted last week (04/09/2020), this is another useful guide from Aviva with regards to our wellbeing whilst working remotely from home.

Working remotely may affect everyone differently but it could be particularly difficult for those who live alone. The tips above should prove useful in maintaining your mental and physical wellbeing.

Please continue to check back for our regular blog posts and updates.

Charlotte Ennis


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Brooks Macdonald – Weekly Market Commentary

Please see below an article by Brooks Macdonald which was received late yesterday afternoon and outlines their latest views on the markets:

Please continue to check our Blog content for advice and planning issues and the latest investment, markets and economic updates from leading investment houses.

Please keep safe and healthy.

Carl Mitchell – Dip PFS

IFA and Paraplanner


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Legal & General – Asset Allocation Team Key Beliefs Blog

Please see article below from Legal & General’s asset allocation team – received 07/09/2020

Techastrophe or Techantrum?

This week we focus on technology stocks, given the recent drama, but also stand back from the hurly-burly and reflect on how far expectations for a vaccine have come since COVID-19 hit in the spring. We also touch on the recent change in tack from the European Central Bank (ECB) where the drumbeats of verbal intervention have started, and inflation data have – once again – been dire.

As with all Key Beliefs emails, this email represents solely the investment views of LGIM’s Asset Allocation team.

Shaken, not stirred

In an impeccably timed blog published last Thursday, Lars asked whether now is the time to start taking profits on technology stocks. Investors across the world obviously took note and decided that the short-term answer was an overwhelming ‘yes’, with the Nasdaq down around 10% in just two days. In recent months, we’ve seen record after record broken by technology stocks.

Nigel Masding on the Active Equity team produced some eye-popping statistics this week, looking at year-to-date returns for the MSCI World, which sum this up nicely. Until the end of August, the index of 1,718 stocks had generated a return of +5.7%. Just four stocks contributed enough on their own to push the index into positive territory and to deliver this return: Apple, Amazon, Microsoft* and Tesla*. An index composed of the other 1,714 stocks is still underwater (source: Bloomberg).

With that in mind, are we seeing the tech bubble pop or is this just a short technical correction? We favour the latter interpretation. There was no apparent news flow that was a convincing catalyst for the move and the overall pattern of performance within equities was not consistent with a risk-off environment or of particular virus concerns. Still, there were a few hints of pretty irrational behaviour in the immediate run-up to Thursday, with high-profile stock splits seemingly responsible for driving tech names higher last Monday and Tuesday.  

We have long-held two guiding principles for assessing when the time might be right to exit technology stocks: excessive valuations and excessive bullishness. In our opinion, neither signal has turned red yet. Outperformance has been driven by a step-change in earnings rather than by valuations. On sentiment, it is impossible to argue that tech is a particularly unpopular sector, but we don’t see signs of excessive bullishness either. For context, we’ve been tactically positive on technology stocks (relative to the broader market) since early 2018.

In the week in which a new trailer for the latest Bond film was released, our conviction in that trade is shaken, not stirred.

Vaccination vacillation

In the late 18th century, Edward Jenner pioneered the world’s first inoculation by intentionally infecting an eight year old boy with cowpox. Medical trials have evolved somewhat since then, but the word vaccine still derives from the Latin for cow. And it is hopes of a vaccine breakthrough that have continued to drive the bull market in equities and credit over recent months. This week saw the Centre for Disease Control (CDC) in the US issue advice to State governors to prepare for potential vaccine distribution as early as 1 November. The chart below, from Professor Philip Tetlock’s Good Judgement Project, shows the extraordinary change in expectations around the timeline to that vaccine. The chance of a vaccine being widely available by March next year is now seen as more likely than not, having been almost inconceivable only a few months ago.

Good Judgement Project: When will enough doses of FDA-approved COVID-19 vaccine(s) to inoculate 25 million people be distributed in the United States?

Source: LGIM, Good Judgement Project, 4 September 2020. There is no guarantee that any forecasts made will come to pass.

In the meantime, Jason Shoup of LGIM America raises the intriguing possibility of a breakthrough in testing technology. If cheap (<$5), rapid (<15 min), saliva-based (i.e. no nose swab), and self-administered coronavirus tests become widely available, it would allow a rapid normalisation in sectors where social distancing is difficult/impossible. The US government have called the development of a vaccine “Operation Warp Speed”. Not to be outdone, the UK government dubbed the development of rapid testing technology “Operation Moonshot”.

Financial markets will be willing to forgive signs of an economic stumble in the short term, provided that the medium-term outlook continues to look reassuring. With COVID-19 cases rising fairly rapidly across large parts of Europe again, these breakthroughs cannot come soon enough.

EUR-eka moment in FX markets

In the last few years, one of the most consistently poorly performing investment strategies has been following currency momentum. The kind of sustained multi-year currency trends that characterised the 1990s and 2000s have become a thing of the past as central banks deploy verbal (and the threat of actual) intervention to manage exchange rates within relatively narrow corridors. This change in landscape has become so extreme that anti-momentum currency trades have been started to become consistent winners. The post-COVID-19 currency markets have been dominated by a lurch lower in the US dollar that threatened to break that pattern: on a broad trade-weighted basis, the dollar index is down around 10% since the March highs with the Federal Reserve’s framework review providing the latest catalyst.

This week brought the first serious pushback against that trend from the ECB. Philip Lane, the central bank’s chief economist said the “euro-dollar rate does matter”. Sternly worded stuff, indeed! More revealing, a number of his colleagues on the Governing Council, under the veil of anonymity provided by an FT article, followed up with even stronger comments: the strengthening of the euro is a “growing concern” and “worrisome”. These kind of comments hark back to the days when Jean-Claude Trichet, former ECB president, used to bemoan “brutal” FX moves.
The market seems to have taken this as an indication that 1.20 is some kind of line-in-the-sand for the single currency. For that to be effective, the ECB will soon need to back up words with action. The ECB is obviously heavily constrained in its ability to cut interest rates further, but we anticipate an extension of the quantitative easing programme to be announced in the next few months. That won’t be a big surprise to the market, but should help to keep a lid on government funding costs in the periphery and tame the recent burst of euro strength, in our view.
The urgency of addressing the situation will have been underlined by some exceptionally weak European inflation data this week. European headline inflation dropped back below zero for the first time since 2016. On a core basis, HICP inflation dropped to the lowest level on record at just 0.4%. There are exceptional circumstances associated with the timing of summer sales, but these are the kind of numbers that will bring an inflation-targeting central banker out in a cold sweat. With the ECB looking dangerously like Old Mother Hubbard (with a bare policy cupboard) we think that staying short European inflation is a strategy likely to benefit from a consistent fundamental tailwind. *For illustrative purposes only. The above information does not constitute a recommendation to buy or sell any security.

A useful article from Legal & General’s Asset Allocation team with a focus on technology stocks, a vaccine for COVID-19 and the recent change in tack from the European Central Bank.

Please continue to check back for out latest updates and blog posts.

Charlotte Ennis


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Invesco – Weekly Investment Update

Please see below an article published by Invesco today, which provides their insights to recent market performance:

Please continue to check our Blog content for advice and planning issues and the latest investment, markets and economic updates from leading investment houses.

Please keep safe and healthy.

Carl Mitchell – Dip PFS

IFA and Paraplanner


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Blackfinch Monday Market Update

Please see below for the usual Monday Market Update from Blackfinch:


  • The seasonally-adjusted IHS Markit/CIPS Purchasing Managers’ Index (PMI) rose again in August to a 30-month high of 55.2, albeit marginally below the earlier flash estimate.
  • The Services PMI figure for August was also revised downwards from its earlier estimate and showed that the rate of job losses across the sector was at its highest since May.
  • Manufacturing PMI fell to 54.6 in August, with the lack of new work to replace completed contracts seemingly causing the slowdown. The data, however, shows that the industry remains in expansion territory.
  • The Bank of England reports that mortgage approvals for house purchases rose to 66,281 in July, up from 39,902 in June and 9,285 in May.
  • Figures from Nationwide show that house prices in August rose at their fastest rate in 16 years.
  • Four UK housebuilders are being investigated by the Competition and Markets Authority following ‘troubling evidence’ over the way in which leasehold properties were sold.
  • Alex Brazier, the Bank of England executive director for Financial Stability Strategy and Risk, tells MPs that it isn’t possible for all office workers to return to their desks, commenting that public health issues, public transport capacity and the ability for offices to comply with COVID-safe guidelines are all significant factors that need to be considered. Brazier adds that ‘we should expect a more phased return, depending on the public health outcomes we see in the coming weeks and months’.


  • Talks restart between US Treasury Secretary Steven Mnuchin and House of Representatives Speaker Nancy Pelosi over a fresh round of stimulus, with the former stating that a ‘bipartisan agreement still should be reached’.
  • Non-farm payrolls show that the US added 1.4mln job in August, in line with expectations, with the unemployment rate falling to 8.4%.
  • Weekly jobs data shows that there were 881,000 new jobless claims, against estimates of 940,000.
  • Tech stocks fall as investors reconsider the valuations of those stocks that have rallied hard over the last few months.


  • The private Caixin survey shows that Chinese manufacturing activity in August rose at its fastest pace in nearly 10 years.


  • The New York Times reports that the US Centers for Disease Control (CDC) has notified public health officials in all 50 states to prepare to distribute a COVID-19 vaccine to health care workers and other high-risk groups as soon as late October or early November. The report suggests that the CDC has laid out the requirements for shipping, mixing, storage and administration of two vaccine candidates, currently only referred to as Vaccine A and Vaccine B.

Please continue to check back for more blog content.

Andrew Lloyd


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AJ Bell – Barratt makes sure its balance sheet stays as safe as houses

Please see article below from AJ Bell received 06/09/2020.

Barratt makes sure its balance sheet stays as safe as houses

Barratt’s confirmation of its decision of 6 July to cancel both its planned second-half and special dividends for fiscal 2020, saving some £375 million in the process, may surprise some but the house builder’s reticence to lavish cash upon investors – at least for now – makes sense for several reasons. The early share price gains suggest that shareholders are not unduly concerned, either, especially as the FTSE 100 member is targeting a return to the dividend list when it feels it can comfortably make a payment that is 2.5 times covered by earnings per share.

The current consensus analysts’ forecasts for the year to June 2021 is a dividend of 22.1p per share, enough for a yield of more than 4%. That said, earnings estimates imply cover of 2.25 times, a little below management’s target ratio, to suggest that forecast could be a little optimistic unless profits exceed current expectations.

Source: Company accounts. Fiscal year to June

Still, a 4%-plus dividend yield may be enough to entice income-starved investors, even if the absence of any distributions for fiscal 2020 means patience will be required as Barratt hunkers down. The reticence to return cash now is understandable for three reasons:

Barratt did accept help from the Government’s furlough scheme and paying a dividend having accepted state assistance would not be a good look in the eyes of the wider public. To give Barratt its credit, though, the housebuilder did return the £26 million it received just as its new financial year began in July, so that could clear the way for a return to the dividend list in the fiscal year to June 2021.

The Government’s Help to Buy scheme supported 35% of last year’s completions, broadly similar to the 36% level seen the year before.

Source: Company accounts. Fiscal year to June.

In its presentation to analysts and investors Barratt notes that just under half of these, or 16% of fiscal 2020’s total completions, would not be eligible to Help to Buy under the new, tapered terms of the programme which will apply from March 2021 to March 2023.

Source: Company accounts. Fiscal year to June.

As a result, management may be inclined to caution, given wider uncertainty that surrounds the economic outlook. The furlough scheme is just starting to unwind and no-one quite knows what that will mean, although the Bank of England continues to expect an increase in unemployment above 7% before the worst is over, compared to June’s 3.9% rate. Any jump in joblessness could hit consumer confidence and the ability of would-be house buyers to meet mortgage payments, so they could be forgiven for deciding to stay put for a while, just in case. Whether a worst-case scenario would cap completions or hit selling prices remains to be seen, but Barratt’s target for volumes in fiscal 2020-21 of 14,500 to 15,000 lies short of prior peaks and speak of a gradual recovery, despite this week’s encouraging mortgage application statistics.

Source: Company accounts. Financial year to June. 2021E based on mid-point of management targets outlined in full-year results statement.

Land purchases are due to go up from £369 million in fiscal 2020 to £850 million in fiscal 2021.

Source: Company accounts. Financial year to June. 2021E based on mid-point of management targets outlined in full-year results statement.

Buying land cheaply is the key to long-term margins so management presumably feels now is a sensible time to buy and prioritise this in terms of current capital allocation, while preserving a net cash balance sheet (as the memories of the fright received during the downturn of 2007-09 have yet to fade), to ensure strong long-term margins and returns on capital.

Source: Company accounts. Financial year to June.

These articles are for information purposes only and are not a personal recommendation or advice.

Please continue to check back for our regular blog posts and updates

Charlotte Ennis


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Active Minds: Jupiter Asset Management Fund Manager Update

Please see the below article from some of the Fund Managers at Jupiter Asset Management posted late yesterday afternoon:

The big dollar downturn?

The Federal Reserve will try to inflate debt away, and the V-shaped recovery is intact, said Mark Nash, Fund Manager, Fixed Income. The US dollar has dropped, and government bond yields have surged following the Fed’s policy shift last week at the Jackson Hole summit, where Jay Powell confirmed that the central bank was prepared to tolerate higher inflation.

What is striking, Mark said, is that global bond yields moved higher too, indicating that the dollar price action is a global reflationary booster. A weaker dollar improves the outlook for the global economy, reducing the appeal of long dated government bonds, and therefore creating steeper yield curves, he explained.

Why? In Mark’s view, it’s because the tide of liquidity has now reversed. The strong dollar was a result of the global dollar shortage, and US growth exceptionalism was linked to less cross-border lending which curtailed emerging market activity and reserve growth in those country’s central banks. This amounted to less dollar liquidity for everyone, including the Fed, and excessively tight emerging market liquidity conditions to prevent local currency weakness (notably in China, for example).  This is why, as the dollar noose tightened, emerging markets underperformed and we saw the US repo funding crisis last year, said Mark.

The Fed’s quantitative tightening program made the problem worse by removing even more dollars from the system. Mark thinks they finally became aware of the error of their ways in 2020, which explains the speedy reaction to the March funding squeeze. It’s much easier to use a crisis to reverse previous mistakes than admit to them at the time!

Mark Nash

Fund Manager, Fixed Income

After Abe, is Japan ready for a taste of Suga?

Dan Carter, Fund Manager, Global spoke about the sudden resignation of Japan’s Prime Minister Shinzo Abe, who is leaving office for health reasons. The Japanese equity market fell somewhat in reaction to the news, although the greater activity has been in the production of column inches.

Dan argued that perhaps the market impact is being somewhat overplayed, reminding us that Japanese equities have seen something of an ‘anti-bubble’ in recent years, rising strongly in nominal terms while earnings multiples have stayed fairly static (due to rising corporate profitability). That hints to Dan at where the correlation/causation sits with respect to Japanese equity market performance under Abe – and it is to a greater extent more to do with correlation.

Shinzo Abe became Japanese Prime Minister (PM) for the second time in December 2012, at the end of a cycle that had seen Japan take a beating from the global financial crisis, the Fukushima nuclear incident, and the destruction of the Tōhoku earthquake/tsunami. An economic and equity market rebound from that low would have happened almost regardless of who was PM, and has been aided by the ongoing structural tightening of the labour market which has seen better allocation of capital and a greater focus on profits. Nevertheless, it is fair to say that Abe was always a pro-business leader, for example cutting corporate tax rates, and he realised that Japan needed to use its capital base better to squeeze more growth out of its maturing economy. So, although Abe’s departure cannot be seen as positive for the Japanese market, neither should it be all that great a blow, in Dan’s view.

The most important question now is who will now take over as Prime Minister. The three names in the frame are Yoshihide Suga, Shigeru Ishiba and Fumio Kishida. Kishida would be the main continuity candidate although is seen as a dull choice, while Ishiba takes a more populist approach and would be less pro-business than Abe, although he’s more popular with voters than he is with his political colleagues so the fact that this election will be held within the party works against him.

At the time of writing, however, the front runner is Suga, the current Chief Cabinet Secretary. He is very much an Abe lieutenant and so we could expect a continuation of the general thrust of Abe’s policy agenda. One key area of difference with implications for the equity market, however, is that Suga has previously been openly critical about high prices charged by the telecommunications sector. Has the strategic savviness of telcos in the last couple of years, through introducing better structured plans and additional services, done enough to address his concerns? Or would a Suga term in office lead to a tightening of regulations and a material hit to the sector’s profitability? This is a live issue for all investors in Japanese equities, particularly those like Dan who also seek a premium yield in addition to growth, and careful thought will be needed as the story develops.

Dan Carter

Fund Manager, Japanese Equities

Investors playing catch-up on gold

Despite this year’s strong rally in the price of gold, from around US$1,500 per ounce at the beginning of the year to almost US$2,000 recently, many investors are still playing catch-up, according to Ned Naylor-Leyland, Head of Gold & Silver. Many active investors remain underweight monetary metals, according to Ned, with only reluctant participation among buyers.

Among recent converts is Warren Buffett, the sage of Omaha, previously no fan of gold, but whose Berkshire Hathaway recently disclosed a sizeable, new position – valued at more than half a billion US dollars – in one of the world’s largest gold mining companies. Behind the rally in gold is the commitment of the Federal Reserve to monetary loosening, the swelling of central bank balance sheets, and the spike in government spending, fuelling distrust of the US dollar. Negative real yields mean that many US Treasury bondholders face losses in post-inflation terms, which makes gold and silver attractive as stores of true value.

The largest gains could be seen, not in monetary metals themselves, but in the shares of companies which mine them, Ned believes. Higher market prices for gold and silver have not yet been fully factored into valuations of mining equities, he argued. Ned said that the shares in silver miners are pricing in silver below US$20, well below current market prices, which have seen silver trade at more than US$28 per ounce lately.

Ned Naylor-Leyland

Head of Strategy, Gold and Silver

From reflation to Brexit: the outlook for UK midcaps

The UK small and midcap team is focused squarely on the dynamic between coronavirus newsflow, the US election in November, the reflation trade and Brexit negotiations, said Richard Watts, Head of Strategy, UK Small & Mid Cap.

This mix of events will make for an eventful fourth quarter of the year, said Richard, adding that his core expectation is a Brexit agreement that will be viewed as not too onerous for the UK. He recognizes the inherent risks in the UK-EU talks as Britain prepares for the end of the transition period at the end of the year, and he notes that the UK market and UK midcap stocks appear cheap largely because of Brexit.

In the US, Covid-19 news has been encouraging recently, with infection numbers falling meaningfully since a spike in July, while the presidential election race may be tightening, with some oddsmakers suggesting that President Trump has pulled level with challenger Joe Biden, said Richard. Trump’s re-election may benefit more traditional, value-oriented companies, he added.

The Federal Reserve’s robust support for the US economy combined with a weaker dollar underscores a reflation trade that has implications for positioning the portfolio, Richard said. He favours a ‘barbell’ approach, with technology companies and other structural winners on one side and value-oriented stocks including banks and housebuilders on the other.

UK housebuilders have struggled to gain traction this year, in contrast to the US, where the housebuilders index has touched an all-time high. The difference in performance seems to be down to Brexit, said Richard, noting the difficulty for investors in balancing the desire for more reflationary exposure with the risks and opportunities of the Brexit dynamic. The solution may be to proceed cautiously, he said.

Richard Watts

Head of Strategy, UK Small & Mid Caps

Tech bulls still charging, but elsewhere it’s a sceptical rally

Ross Teverson, Head of Strategy, Emerging Markets, made some observations from the second quarter reporting season. Generally, these fell into two categories – those from companies that are relatively unscathed by the pandemic and those that have faced major challenges.

Internet and tech names stand out among the former category, and banks are well represented in the latter camp. The leading technology and internet commerce businesses in China, some of which already dominate some of the local indices in terms of constituent weightings, posted strong numbers with sales up by around 30% year-on-year. Semiconductor and tech hardware companies have likewise performed well as the sector benefited from a following wind. These results haven’t materially altered Ross and his team’s view of the individual companies: the strategy continues to hold their preferred names in these sectors, and so far they have resisted the temptation to take profits as they see stock-specific reasons why positive change can continue to drive earnings upgrades.

Among the more challenged part of the emerging market equity universe, Ross sees no problem in making a valuation case for investing in banks, many of which are trading at or even below book value. Banks have clearly been some of the largest hit business by the Covid-19 pandemic, but aggressive provisioning in the first quarter when the pandemic first took hold is now feeding through to an improving trend for capital ratios. Ross also highlighted a Russian bank, which delayed its dividend decision earlier in the year, but has now proposed to pay a normal level of payout (indeed it is higher than last year’s).

In summary, Ross said that for those companies that have been impacted by the pandemic, there is mounting evidence that the worst is behind them, although (with the exception of the internet/tech sector as mentioned above) there is still a lot of scepticism expressed in share prices.

Ross Teverson

Head of Strategy, Emerging Markets

This article gives a good insight into what is currently going on within a range of different areas and shows the current views of the fund managers within these sectors.

Articles like this provide us with a good update and insight into the current direction of travel within the markets.

Please continue to look out for our regular blog updates.

Andrew Lloyd


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Markets in a minute: Global markets rise but UK shares lag behind

Please see below for the latest Markets in a Minute update from Brewin Dolphin, received late yesterday 02/09/2020:

Global share markets mostly rose over the past week, driven by growing signs of an economic recovery, positive news on coronavirus developments, and the US Federal Reserve’s shift on inflation targeting (see below).

Sentiment in the US was so bullish that the S&P500 set fresh record highs every day last week, helped by a cooling of the US/China tensions. The UK, however, was a notable underperformer, with the FTSE100 weighed by a stronger pound. This reduces the value of multi-national companies’ dollar-based earnings.

A mixed start to the week

The UK markets, along with many in Europe, were closed on Monday, although in the US it was business as usual and shares fell slightly.

On Tuesday, however, US shares rebounded, with the Dowgaining 0.76% and the S&P500 rising by 0.75%, while the Nasdaq continued its extraordinary rally, rising by 1.4% to 11,939.67.

In the UK it was a different story, as the continuing strength of the pound and Brexit uncertainties saw the FTSE100 fall by 1.7% to 5,862.05, its worst level in three months.

In early trading on Wednesday, UK shares were heading up, as Nationwide reported house prices had had risen to an all-time high of £224,123 in August, as activity rebounded after the lockdown was eased.

Market performance*

  • FTSE100: -3%
  • S&P500: +2.4%
  • Dow: +1.4%
  • Nasdaq: +4%
  • Dax: -0.6%
  • Hang Seng: -1.2%
  • Shanghai Composite: +1%
  • Nikkei: -0.7%

*Data for the week to close of business, Tuesday 1 September.

Coronavirus news

New global coronavirus cases have been trending sideways for a month now. Infections in emerging economies may be slowing especially in Brazil, South Africa (which has gone from 13,000 new cases a day down to around 2,000), Pakistan, Mexico and Saudi Arabia.
In addition, new cases are falling in developed countries, led by the US which has seen a sharp decline, and also Japan, both of which are helping to offset some worrying rising trends in Europe.

Encouragingly, the death rate in this second spike of cases in developed countries is far lower than the highs of April, even though the number of new cases being detected is well above the April highs. This is likely to be because there is more testing of younger people and therefore more cases detected among younger, more resilient populations. This is helping to avoid a return to a generalised lockdown and helping keep confidence up. 

UK piles on the debt

Although the UK has only just entered a recession, recent data has started to illustrate the true extent of the damage so far suffered during the coronavirus pandemic. The Office for National Statistics has revealed that, following the sheer cost of its Covid-19 response, UK government debt has risen above the £2trn mark for the first time.

According to the data, spending on measures (such as the widely used furlough scheme) meant total UK government debt was £227.6bn higher in July 2020 than it was a year before. At the same time, tax revenue has been hit hard by the fact many businesses and people are earning and spending less. Combined with greater government borrowing, this is the first time UK government debt has been above 100% of gross domestic product (GDP) since the 1960s.

Jackson Hole Symposium

In his speech to the annual gathering of central bankers and policymakers in Jackson Hole, Wyoming, US Fed Chair Jerome Powell confirmed it is moving to a system of inflation “average targeting”.

This is important because it means that it will allow inflation to run above 2% to make up for a previous undershoot. The Personal Consumption Expenditure (PCE) price index is the Fed’s preferred inflation index for the 2% target, and in the chart below you can see it has been running below 2% for a sustained period of time for the past decade.

According to the St Louis Fed, even if you allow for 2.5% PCE inflation, which is an overshoot of inflation of 0.5%, it will take until 2032 to make up for the inflation undershot over the past decade. So, the implication is that the Fed wants to let the economy to run “a little hotter”, with faster-rising prices, without the need to raise interest rates or tighten monetary policy when inflation is above 2%. It also likely means that US interest rates will stay at, or near, 0% for a long time, which should be a positive for investment assets. Indeed, many think that the US will need to return to near-full employment and inflation of at least 2% before the Fed will consider raising rates again. We expect further guidance on this at the next Fed meeting later this month.

US/China tensions cool

Powell’s speech came in a week of broadly positive economic news for the US. At the beginning of the week, both the US and China affirmed their willingness to negotiate and declared they were ready to progress with trade talks. With tensions between the two nations a recurring source of stress for investors, this update was welcomed by markets.

US economic data

  • US Durable goods orders in July were up 11.2% vs expectations of 4.8%, helped mostly by new orders for vehicles and parts (+21.9%), electrical equipment and electronic products. Durable goods orders are a proxy for business investment demand and it has now risen for a third consecutive month – a sign things are really normalising.
  • US housing data, which is vital in supporting economic growth, has been really encouraging. July new home sales came in significantly above expectations at $900k versus the estimated $790k, surging to the highest level since the 2009 financial crisis. Existing home sales increased by a record 24.7% in July to an annual rate of $5.86m, the highest level since December 2006. The median house price rose to 8.5% on an annualised basis, the highest since April 2015. Pending home sales also rose 5.9% in July compared to June, after a huge 16.6% increase in June over May.

Australia enters recession

Having avoided a recession even during the financial crisis of 2008/09 (thanks to huge demand from China for its iron ore and other commodities), the world’s longest economic expansion has finally ended. After almost 30 years of uninterrupted growth, Australia’s economy contracted by 7% in the June quarter, following a 0.3% contraction in the first three months of the year.

Brewin Dolphin are market leading fund managers, and so receiving their regular insight in this efficient manner is a quick but well-informed way to update your consensus view of the global markets.

Please keep using these blogs to regularly update your knowledge of current market affairs from around the world.

All the best, keep well!

Paul Green


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Looking After Your Mental Health and Wellbeing in Difficult Times

Please see article below from Aviva which is a guide to looking after your mental health and wellbeing in these difficult times – received 02/09/2020.

Staying on track Looking after your mental health and wellbeing in difficult times

It’s OK not to be OK all the time

The past few months have been a strange and anxious time for many. And even though things may be gradually getting back to normal now, it’s hardly the same ‘normal’ we knew before.

Moving out of lockdown and getting used to new ways of working can bring challenges of their own, even if you’re moving back to a familiar environment. Just as importantly, the challenges don’t end when you go home. In these difficult circumstances, you may be worrying about the health of family or friends or finding it hard to relax when you’re staying mindful of social distancing. All of this can add up.

It is common to have times in our lives when we feel we just can’t cope. It’s nothing to be embarrassed about.

Thanks to national campaigns and changing attitudes, many people now feel more able to talk openly about mental health issues – and to pass on guidance about looking after wellbeing, both physical and mental.

This brief guide is designed to help you look after your mental health at work and in your home life – by pointing out some warning signs that might show if you’re struggling to keep stress at bay, as well as offering some suggestions on what to do if you’re feeling the strain, and how to get back to your best.

First steps

Before you return to the workplace, it’s a good idea to think about your job and any issues that apply to your own unique situation – all of us are individuals with our own priorities and commitments. Plan an initial conversation with your manager and think of the questions you’d like to ask in advance. These can cover practicalities, as well as more general concerns – knowing exactly how your return to work will be managed and the safety measures in place will increase your confidence and help you avoid anxiety.

Warning signs to look out for

It’s all too easy to tell ourselves we feel fine, or that we’re managing all right, when in fact stress could be affecting our wellbeing more than we realise. It’s only natural to have ups and downs from one day to the next. But there are a number of signs – both physical and behavioural – that might indicate that someone is struggling and could be at risk of developing poor mental health such as:

  • Frequently feeling more irritable, aggressive or feelings of nervousness of anxiety
  • Increased fatigue, poor sleep or nightmares.
  • Feeling overwhelmed by everyday tasks or commitments.
  • Lack of interest in personal appearance or hygiene.
  • Withdrawal from social and personal interactions with family or friends.
  • Drinking or smoking more than usual.
  • Increased physical symptoms such as headaches, aches or pains, or digestive problems. Loss of interest in work or leisure activities.

Working from home: Time to reflect on the positives

You may have heard that pressure is a motivator – and it’s true to say that a manageable level of pressure can improve productivity. But when the pressure is too high, or lasts too long, it can cause stress – which can eventually lead to poor mental health. The pressure of work can be especially strong now that many businesses and organisations are coping with the economic and practical implications of COVID-19. And if you’ve recently returned to the workplace after working from home, remember that a change back to something you did before is still a change – which can be stressful in itself.

Take work issues in hand

If a situation at work is affecting you and you can’t resolve it yourself, try talking to your manager about your concerns. Or, if you’re not comfortable taking the issue to your manager, try to find someone else in the organisation. You could try talking to your personnel department or a trade union representative. And if your organisation has an employee assistance programme (EAP), check if it offers access to counselling or other sources of specialist help. This can also be a good route to take if you just need to talk with someone.

Keeping on top of things

Even if you don’t have specific issues to discuss, it’s a good idea to have regular one-to-one talks with your manager to share how you’re feeling and whether the experience of returning to work has met your expectations. And, as well as your manager or other team members, there’s someone else you need to ‘check in’ with on a regular basis – yourself. Ask yourself how you’re coping, and what you could do for yourself to stay mentally healthy, as well as what might be done differently at work.

Putting work concerns into perspective

Sometimes, we can put ourselves under more pressure than we need to at work. It’s all too easy to worry that the boss would be less than happy if we need to devote more time to commitments outside work. But most employers are conscious of their duty of care, and increasingly recognise that flexible working can boost productivity as well as being positive for employees.

Thankfully, many would prefer their employees to go home on time, or work from home so they can meet family commitments, rather than putting in consistently long hours and compromising their wellbeing. By carefully apportioning your time and priorities, you may find that it’s possible to improve your work-life balance. In practical terms, you could try allocating specific times to individual tasks instead of just writing a ‘to do’ list at the end of each day. This can give you confidence that you’ll have time to get everything done instead of dwelling on the following day’s challenges even when you’re not working.

Think about your working environment

If you’re returning to the workplace after working remotely, this could be a good time to review your working environment. If you aren’t comfortable, or don’t feel at ease with your surroundings, you could risk harming both your mental and physical health.

When you get home

It’s easy to let worries about things we can’t directly influence encroach on time that could be devoted to relaxation or enjoying the company of loved ones. The ease of access to news through digital as well as traditional channels can be overwhelming – especially when the news is largely unsettling. You could think about taking in updates at specific times, rather than through an ‘always on’ approach. Being unable to talk about your worries can make them worse. Talk to someone you trust about anything that’s on your mind.

Taking the physical activity route to good mental health

Physical activity and exercise can help reduce the effects of stress. In addition to the obvious benefits to fitness, exercise releases hormones which can help you to manage stress and promotes better sleep. Taking the physical activity route to good mental health It’s easy to find ourselves becoming less active right now. More of us will probably continue to work from home after the pandemic has eased, and right now there are fewer opportunities to get out and about while restrictions are still in place. But there are plenty of ways to keep active at home, including online workouts, fitness apps and yoga routines. Or, if you have a garden, you could give it a makeover. If you can manage to exercise outdoors, this can help boost your vitamin D levels – and simply feeling that you’re surrounded by nature can also help to raise your spirits

Accept that things change… and change what you can

Change brings challenges – this is just as true whether we’re talking about the changes brought on by the COVID-19 pandemic or any of the big events that form part of regular life. Small steps are the way forward. Be calm, be prepared, don’t try to take on too much – and don’t be afraid to ask for help. If you’re experiencing persistent symptoms, or feel worried about your mental health, do make an appointment with your GP

At this strange time we are all in the same boat, adapting to circumstances which are difficult for everyone.

Some people may be starting to return to work whereas others may still be working from home, either way it is important to look after your mental health.

Charlotte Ennis