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Weekly Update – 11th December 2020

By December 11, 2020No Comments

Welcome to the latest in our weekly client updates – now with just two weeks to go before Christmas.

Two stories dominated the news this week – the roll out of the Pfizer vaccine, and the continuing negotiations over Brexit. With the latter, it is possible that the news may have moved on by the time you read this. The logistics of getting the update to you on Friday mean that we must write it on Thursday. With the Brexit talks going down to the wire it may be that late night negotiations on Thursday change the situation.

There will, however, be no change in the other main story, as our TV screens continue to be full of people being vaccinated. This was the week that 90 year old Margaret Keenan became the first person in the world to receive the vaccine, as the national rollout gathered pace.

Elsewhere there was bad news on jobs in both the UK and the US, and Japan became the latest country to launch a further Covid stimulus package for its economy.

As usual we have looked at all the main stories below – with the customary reminder that the stock market figures quoted were correct at close of business in the relevant market on Wednesday evening, and the commentary was written on Thursday morning so that the update could be with you on Friday.

The Latest News

There is little point in going into the Brexit news in any granular detail. As we write, the BBC is reporting that ‘large gaps remain’ between the UK and the EU, with Sunday now the final deadline for any agreement to be reached. There are still considerable differences over fishing rights. Boris Johnson has stated that the UK ‘cannot be the only country in the world that doesn’t control its own waters’. The two sides also appear to be some distance apart on the ‘level playing field’. Simply put, the EU does not want to find a low-tax, low-regulation competitor right on its doorstep.

Hopefully by this time next week we will have some more definite news to bring you.

Meanwhile figures came out on Thursday morning showing that the rate of growth in the UK had slowed: the data from the Office for National Statistics showed just 0.4% growth in GDP in October. With next month’s figures – for November – due to reflect the second lockdown, the chart doesn’t look too rosy at the moment.

The unemployment rate rose to 4.8% in the three months to September, up from the previous 4.5%. With the furlough scheme still winding down, the unemployment figures can only get worse.

This mirrored news from the US, where jobs growth slowed sharply. The US economy added 245,000 jobs in November – well below many pundits’ expectations.

Back in the UK, new car sales were down (again) in November and, while the newspapers reported a ‘£10bn bounce back’ as lockdown ended and shoppers returned to the high street, the data showed that footfall was roughly 25% down on the same period last year.

In Europe work has once again come to a stop on Tesla’s new factory in Germany – the so-called Gigafactory – with environmentalists winning a court injunction, arguing that the factory will endanger the habitats of lizards and snakes.

In Japan, Prime Minister Yoshihide Suga announced a 73.6tn Yen (£530bn) stimulus package for the economy, aimed at correcting the damage done in the second quarter of the year when the Japanese economy shrank by 8.2%. The stimulus package will include subsidies for green investment and spending on digitalisation.

The Stock Markets

On balance it was a good week for the stock markets we cover in the update. Let’s start at home, where the FTSE-100 index rose 2% to close Wednesday night at 6,564. The pound had another quiet week against the dollar, and ended almost unchanged at $1.3365.

Elsewhere in Europe the German DAX index ended the week unchanged in percentage terms at 13,340, while the French stock market drifted down 1% to 5,547.

Despite the poor data on jobs, this week saw the US Dow Jones index reach an all-time high of 30,223 on Monday. It had slipped back a little by Wednesday and ended the week at 30,069 where it was up 1%. The S&P 500 index was unchanged in percentage terms, closing Wednesday at 3,673.

In the Far East China was the market which lost the most ground this week. The Shanghai Composite index was down 2% at 3,372. The markets in Hong Kong and Japan were relatively unchanged at 26,503 and 26,818 respectively, while the South Korean market enjoyed a good week – ending Wednesday up 3% at 2,755.

Our Thoughts

Brexit… It’s difficult to know what order to put things in. This week has seen ‘last ditch’ talks with the EU, the PM making a ‘last gasp dash’ to Brussels and ‘the final throw of the dice’. Does a ‘last gasp’ come before or after ‘the final throw of the dice?’

We doubt that anyone – including the great and good eating a fish supper in Brussels – has a clue. What is certain is that by the time we send you next Friday’s update we should finally know whether it’s ‘deal or no deal’.

As we noted above, Thursday morning’s headlines hinted at ‘large gaps remaining’ but you suspect that a deal may still be done, if only because the EU has such a track record of last minute deals. Meanwhile the UK has quietly signed a free trade deal with Singapore worth £17bn.

The news bulletins over the next week will be showing you a lot more footage of people receiving the vaccine. That’s good news: as we reported last week, the overwhelming majority of firms are confident of bouncing back to health once the vaccine has been fully rolled out.

Finally, this week we come to a story that may be bigger than both Brexit and the vaccine. Earth, it appears, has failed the interview and will not be admitted to the Galactic Federation.

According to professor, and retired Israeli general, Haim Eshed – and reports in several papers – there is a Galactic Federation of alien species among the stars. But they don’t want us humans to be part of their club, as we’re ‘not ready’. The aliens won’t make this known publicly as they are worried that we’ll ‘freak out’. They have, however, contacted President Trump who may be on the verge of revealing their existence and would likely do so on Twitter. Why would he do that? We don’t know; maybe the aliens are eligible for a postal vote in Pennsylvania…

Assuming we are still here next week then we’ll bring you the last client update before Christmas. In the meantime anyone who wants to read more about this story should simply tap ‘Aliens have contacted Donald Trump’ into Google. There are half a million results, so you won’t be short of something to read over the weekend…