Hello, and welcome to our latest weekly client update.
It would be easy to forget that it’s Easter this weekend. It is, and that means we have brought this week’s update forward by a day. The stock market figures quoted were accurate as at close of business on Tuesday, and the update was written on Wednesday morning and revised after the Government’s briefing on Wednesday afternoon.
The latest news
Last week, we reported that the Prime Minister had tested positive for Covid-19 and was in self-isolation. As everyone will now know, his condition has deteriorated and, as we write this, he has spent his second night in intensive care. As we do with everyone suffering from this dreadful virus, we send him our very best wishes for a speedy recovery.
In the interim, Dominic Raab is standing in for him but, as expected, Wednesday’s briefing saw Chancellor Rishi Sunak fielding the tough questions, after it emerged that the banks had approved only 0.65% of applications for the Business Interruption Loan Scheme.
On the high street, this week saw Debenhams call in the receivers and New Look simply refuse to pay its creditors, instead inviting them to come and take their stock back. Some high streets are going to look very different when this crisis is over.
Global airlines warned of 25m job losses and the French Finance Minister warned the country was facing its worst downturn since World War II.
More optimistically, the rate of infection in Spain and Italy does appear to be easing slightly, and Europe is starting to look at a staggered relaxation of the current lockdown restrictions. There was also good economic news from Germany, which we report on below.
The stock markets
Last week saw most leading stock markets fall. This week, or in the six days since our last client update, they have all moved resolutely in the right direction.
The German DAX index led the way, rising by 9% to 10,357, boosted by news that factory orders had only fallen by 1.4%, much better than the analysts’ predictions of 2.4%.
In the US, the Dow Jones index was up by 8%, while at home the FTSE 100 index of leading shares rose 5% to 5,704. The markets in France, Hong Kong and Japan all rose by a similar amount.
South Korea was the best performer in the Far East, with the market up 8% to 1,824 while China’s Shanghai Composite rose 3% to 2,821.
Finally, the pound started the week trading at $1.2378 and ended it at $1.2344, unchanged in percentage terms.
If you are writing a monthly or quarterly review of the news and stock markets, you have a longer timeframe and, almost by definition, a more balanced mix of good and bad news. Writing every week you’re much more at the mercy of events and, as we have commented above, this was a week when there was certainly some bad news, especially if your glass is by nature half empty.
Despite that, world stock markets had a good week. There seems to be a growing realisation that doing ‘whatever it takes’ cannot include crashing the world economy, and stock markets responded rapidly to the news from Germany and the possible easing of lockdowns in Europe.
As we wrote previously, we are certain that when Covid-19 is defeated – as it will be – there will be a real sense of optimism and a determination to rebuild as quickly as possible.
And one man with a huge sense of optimism was Italian runner Fabio Faggiani. Following hot on the heels of Frenchman Elisha Nochomovitz who ran a marathon on his apartment balcony, Signore Faggiani completed a full marathon inside his apartment by running round his dining room table. Completing the full distance of 26.2 miles meant that our hero had to run around the table 2,800 times.
There is no word yet on whether Signore Faggiani was trying to watch television at the time. Or, indeed, on whether the people in the apartment below were cheering him on.
Definitely cheering, though, will be children in New Zealand, where Prime Minister Jacinda Ardern has added both the Easter Bunny and the Tooth Fairy to the list of the country’s ‘essential workers.’
Have the best Easter you possibly can in the current circumstances, and we will be back with another update on Friday of next week.