Investment report 4th August 2020
Most Markets have ended the month at a similar level to the start, albeit there was an uplift mid-month, with the exception of the UK which has dropped primarily because the £ has strengthened.
The following chart shows the US and UK market during July. The FTSE 100 represents the 100 largest companies in the UK and the S&P 500 represents the 500 largest in the US. The Dow Jones is often quoted but this only shows the top 30 companies and is dominated by technology companies.
Announcements in the past month regarding Central Bank support for both the US and Europe has helped Markets and has now fuelled concerns over inflation.
We had positive manufacturing data from the UK, China, Spain, Italy, France, Germany and the US – albeit from a low base. Nevertheless as lockdown is lifting and people are returning to work, the Global economy is starting to show signs of life.
We still have a number of risks to contend with in respect of a second wave, Brexit for the UK and of course President Trump. He is still keen to try and control China’s influence but is becoming a little less focused as the chance of re-election in November seems to be getting thinner by the day.
We have seen Stock Markets in most countries recover from their low in March, with the exception of the UK. This now makes our own Market more attractive on a valuation basis and it will be interesting to see if the economic results for the rest of the year meet expectations.
We did see economic improvement in the end of 2019 and early 2020 and hopefully this progress has only been delayed rather than cancelled.
Once the furloughing of staff stops we are likely to see further redundancies and indeed more ‘high street’ companies are likely to suffer as the result of the explosion in online shopping during the lockdown.
These comments are my own thoughts on the current outlook and in no way offer any guarantees.
My anticipated half-year report on the Portfolios for July has been delayed and should be with you over the next week or two.
As always, should you have any concerns you wish to raise, please do contact me.
We are working from the office more frequently, though not quite full time. The office is usually manned every morning but not all afternoons – still doing some tasks from home, where possible.
We are Covid ‘safe’ and therefore able to see clients in the office.
