8th April 2020
Main Europe nations announce recession alarms
Both German and French economies have entered into a historic recession after only being in the COVID-19 turmoil for a few months. In Q2 2020 the German economy is set to contract by 10% which is double that of the 2008 recession. At the same time France has announced its GDP will contract by 1.5% for every week the economy is in lock down and posted that GDP in Q1 2020 contracted by 6% which, given the relative COVID-19 free Jan and February, this 6% number is almost entirely from March. France has forecast the COVID-19 virus will hit economic output the most since the second world war.
4th April 2020
US PAYROLLS POST 710,000 JOB LOSSES IN MARCH
US non farm payrolls have delivered their first negative print since March 2009. The level of job loss was predicted to come in at 100,000 losses, down from 270,000 jobs created in February. The actual number came in at a total loss of 701,000 which was seen as a massive miss Vs expectations. Markets did not move a huge amount on the news with many speculating that the rally in oil markets has helped to offset some of the negativity from this unemployment number. The realisation that this loss was incurred before the social distancing measures were enacted in the US has led to speculation that the worse is yet to come with some predicting the number will stretch into the millions.
2nd April 2020
US unemployment claims surge to new record
US jobless claims rose to a new record of 6.65 million in the week ending March 28, according to the Department of Labour, as the US stepped up their efforts to fight the spread of the coronavirus with many more shops and restaurants forced to close. This bring the two-week total to nearly 10 million and sets the seen for Friday`s job`s report, which is likely to highlight the first signs of the damage to labour markets as a result of the coronavirus pandemic. US futures, which were looking at modest gains at the opening of the US stock market, fell on the news, while the US dollar and gold rose.
26th March 2020
Record unemployment claims in the US
Data released from the US today shows the staggering scale of job losses in the first week since the government began urging citizens to stay home. 3.3m people filed a claim for unemployment benefits in the week ending Saturday, up from 282,000 the week before. This is the largest single-week rise in unemployment claims since records began being published over 50 years ago. Despite this news, US equities opened strongly, continuing the gains made over the last couple of trading sessions after the $2 trillion stimulus package was approved by the US Senate overnight.
25th March 2020
Congress sign largest bailout in US history
The US Senate has finally agreed a US fiscal stimulus package totalling 2 trillion dollars. The level of support to the US economy marks the largest US bailout in history. The package will stimulate both businesses and consumers with business cash injections and means tested cash handouts for struggling US households. The bill, which has now passed through the Senate, needs to pass through Congress later today which will finalise the deal. The bailout package has caused global equity markets to rally more than 10% on the news with some speculating this could be a false bottom as the global economy continues to grapple with the virus.
24th March 2020
UK in lock down
Prime minister Johnson yesterday took the unprecedented measure of closing Britain to all but essential services and essential travel in a bit to halt the spread of the virus. The measures will remain in place for three weeks to begin with or until there is evidence of the strategy working to slow the rate of infection. Some have speculated that the UK has been late to announce these measures when compared to countries which are further along in the coronavirus pandemic.
23rd March 2020
US FED commits to unlimited stimulus to fight corona slowdown
The US Federal Reserve has stunned markets with a commitment to providing unlimited stimulus in the form of $600bn in asset purchases. What surprised markets was the commitment to buy BBB rated debt and even corporate debt ETF's and asset backed securities. This is an unprecedented level of monetary stimulus which has never before been seen in capital markets. The announcement prompted the S&P to rally into the green and force the dollar to give back some of its pre-market gains.
16th March 2020
Federal reserve cut interest rates to 0% as Coronavirus continues
The US Federal Reserve, as part of a global coordinated effort, have lowered interest rates to 0% which is a level not seen since 2015. In conjunction with this the Fed announced they would be including $700Bn buys of US Treasuries to prop up this essential market. This move is part of a global coordinated effort from central banks to pump monetary stimulus into the economy to stabilise markets against the fear that the global economy is shortly going to enter a recession.
12th March 2020
European Central Bank launches further monetary stimulus
The European Central Bank (ECB) has launched a plan of further stimulus in an attempt to counter the negative impact of the coronavirus on the eurozone economy. ECB President, Christine Lagarde, announced today further loosening of monetary policy, with a planned 120 billion euros of bond purchases by the end of the year, although the main deposit rate will remain unchanged at its record low of minus 0.5 per cent. This is on top of their existing commitment to buy 20 billion euros of bonds a month. The central bank also said it would launch a new program of cheap loans for banks as a temporary measure until June. European stocks continued to decline after the announcement, while European debt broadly weakened.
12th March 2020
Dow Jones officially falls into bear market
The Dow Jones index officially ended the longest running bull market in US history yesterday by falling the required 20% to qualify as being in a bear market. The Dow Jones, the US’s industrial index, was pushed into bear market territory on the WHO announcement that the coronavirus was now officially a global pandemic. An underwhelming Presidential address to the nation also caused further concern about the US’s inability to react quick enough to the viral outbreak whilst banning travel to the US from mainland Europe.
11th March 2020
BoE cuts rates by half a percent
The Bank of England has, this morning, voted to cut UK interest rates by 0.5% taking the rate to just 0.25%. The move has come as a double effort from the UK government to deliver monetary stimulus in the form of an interest rate cut this morning and further fiscal stimulus measures when the budget is announced later today. This is all to help insulate the UK economy from a downturn in economic growth from the virus. The BoE also announced its intention to increase lending to small and middle-sized businesses in the UK to the tune of 100bn pounds which should provide further support.
9th March 2020
Stock sell off deepens on corona and oil concerns
Equities plunged today on a dual headwind of Coronavirus concerns and OPEC’s decision not to prop up the oil market with supply cuts. The decision from OPEC surprised investors and prompted the price of oil to fall over 30% as a result. This had a knock-on effect into global equities which served to deepen the Corona induced selloff with some indexes falling to levels not seen since the 2008 financial crisis.
6th March 2020
US economy adds more jobs than expected in February
Payroll data released today showed the US economy added 273,000 jobs in February, far higher than the gain of 175,000 forecast by economists. Unemployment was slightly lower than expected at 3.5 per cent versus the 3.6 per cent predicted. Overall, the market reaction was fairly muted, with government debt remaining strong and US futures continuing to decline. The figure indicated that employment was holding up as coronavirus concerns grew, though this was before the outbreak intensified, therefore next month`s jobs number will likely be of more interest to market participants.
3rd March 2020
Federal Reserve cuts interest rates by half a percent
The Federal Reserve has engaged in an emergency interest rate cut of 0.5 per cent in response to the spreading of the coronavirus which has disrupted economic activity in many countries, with the risks to the US outlook having changed materially. The central bank reiterated its intentions to use its tools to support the economy where it can, however, the question is whether or not lower interest rates can stimulate consumer spending, revive the tourism and travel industries and support manufacturing companies who require materials from abroad. US equity markets rose sharply on the news, but later pulled back, while government debt also strengthened following the announcement, as represented by a fall in yields.
28th February 2020
Single week marks one of the worst since financial crisis
Losses on the FTSE 100 accelerated today with the US opening sharply lower as investors continue to pull billions out of the equity market. This week’s sell off is now approaching 12% and marks one of the worst weeks for global stocks since the 2008 financial crisis and, at this stage, shows no signs of slowing. In contrast to Monday’s rally in gold, the precious metals price is now reversing with speculation that profit taking is now occurring in the gold market. Investors are now looking to central banks around the globe to step in and stimulate the global economy to prevent a global recession.
24th February 2020
FTSE opens lower on viral fears
The FTSE 100 has tumbled 3.5% on the first day of trading this week on fears the coronavirus is on the verge of tipping the global economy into a recession. The slump in the UK’s largest 100 companies came off the back of a steep sell off in the US markets on Friday with the S&P500 down 2.6%.Gold prices spiked to over 1,600 dollars an ounce on the news as investors flocked to safe havens to protect capital. Investors remain on alert for any further deterioration in sentiment before deciding where to go from here.
20th February 2020
UK Household spending beats expectations in January
UK household spending rose more than expected in January showing the UK consumer has taken heart from the increased level of certainty provided from a stronger UK government and the UK’s final departure from the EU. The numbers indicated a rise of 0.9% over last year which was higher than the forecasted rise of 0.7%. This announcement comes off the back of a strong employment figure for the UK in January which backs up TAM’s assessment that the UK economy is showing a more robust economic recovery than many were forecasting. This increase in consumption bodes well for domestic facing businesses and funds invested into them.
17th February 2020
Jupiter Asset Management to buy Merian Global
Jupiter Asset Management has struck a deal to buy Merian Global Investors for £370m via a new share issuance in Jupiter stock. Whilst not the largest asset managers in the UK, the merger brings together two favourites of the industry with a combined £65bn in assets under management. With both fund houses suffering outflows in assets over 2019 the two entities hope this new merger will revitalise their opportunities and bring the groups asset inflows back into positive territory.
30th January 2020
Bank of England holds rates in first meeting of the year
The Bank of England has voted 7-2 in favour of holding interest rates at their current level of 0.75 per cent. The Monetary Policy Committee’s decision was based on several factors including an improvement in business sentiment since the general election, a reduction in global trade tensions and better UK survey data of households and companies, which led them to believe that a cut was unnecessary at this time. Having said this, they also downgraded the UK growth forecast, with an estimate for average growth in the UK economy of 1.1 per cent per annum over the next three years. Carney expressed that some modest tightening may be needed over the next few years if the economy continues to perform well, which contrasts to earlier comments where he stated that he expected “limited and gradual” interest rate rises over the coming years. The UK government bond market weakened on the news, while the pound gained strength.
30th January 2020
Coronavirus drives markets lower
The spread of the Chinese originated Corona virus has now spread into India taking the total list of countries affected to 16 and prompting the WHO to consider announcing the spread of the virus as a global emergency. Markets have continued to swing from positive to negative on updates and setbacks in the global effort to contain the virus. Markets are down another 1% today on fears of a continuation in the spread of the virus.
28th January 2020
UK approves use of Huawei infrastructure in 5G networks
It was announced today that the UK government has approved the use of China`s Huawei equipment in the country`s 5G networks, with the goal to provide access to more advanced, world-leading technology. There has been concerns around the risk of exposing Britain to spying by the Chinese sate, particularly coming from the Trump administration. The UK National Security Council has addressed these concerns by imposing a 35 per cent market share cap and excluding Huawei from the sensitive, core parts of the networks, with the aim to slowly reduce the role of Huawei as new entrants come to the market.
27th January 2020
Stocks fall as coronavirus spreads
US stocks experienced their largest one-day drop since the beginning of October as the escalating coronavirus has been reported to have killed at least 81 people in China and infected over 2,500, with cases now reported in several other Asian countries as well at the US, Canada, France and Australia. The Chinese government has extended the public transport shutdown to cities and announced further curbs on travel between China and Hong Kong in an attempt to contain the virus. Markets have been reacting on fears about the derailment of global growth prospects. US and European stocks have fallen, whilst safe havens such as government debt and gold are back in demand.