News & Insight Weekly Newsletters

07 August 2020 | William Buckhurst

That Was The Week That Was

MACRO

  • In the UK, the Bank of England kept rates on hold and upgraded their forecasts on economic growth while predicting more of a ‘U’ as opposed to ‘V’ shaped recovery
  • Deputy Governor of the Bank of England, Dave Ramsden, refused to rule out negative interest rates
  • In the US, the government outlined much bigger than anticipated numbers for US treasury issuance

STATISTIC OF THE WEEK

With bond yields grinding ever lower, the Financial Times recently calculated that 86% of the global bond market is now yielding under 2%, compared with in 2008, when over 70% of the global bond market yielded above 4%.

Just 3% of the investable bond market today yields more than 5%, a level which is at all-time lows and represents a massive drop from only a few years ago.

COMPANY NEWS

  • Legal & General reported a 6% fall in operating profit for the first half of 2020 and continued to hold its dividend, unlike most UK insurers
  • IWG showed revenue growth for the first half of 2020 and good cash management
  • BP halved its dividend, which was less than Shell had previously cut by, but they were starting from a lower base anyway

FUNDS

A meeting with a European logistics fund showed how the combined forces of urbanisation and e-commerce are driving demand for logistics warehouses into more urban locations at a rapid pace. This is creating a demand and supply mismatch which will need local government intervention to ensure cities are provided with the economic infrastructure they need to survive, while minimising the detrimental effects on the environment and social infrastructure.

THIS WEEK IN HISTORY

1945: An atom bomb is dropped on Nagasaki. Global stock markets rally as they see an end to World War II

1974:  The day after US President Nixon announced his resignation, stock markets fall. The Dow Jones Index drops nearly 1% to finish at 777.30 and stocks continue their sharp decline for the next month, falling to 648, a nearly 19% decline over the next few weeks

 RE-OPENING TIMES

Shadow health secretary Jonathan Ashworth said it is a "national priority" to get children back into the classroom, after scientists warned there may have to be trade-offs for schools to reopen.

A member of the government's scientific advisory group, SAGE, has suggested one trade-off might be to shut pubs.

 

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return GBP)

2.20

-2.74

-14.58

6.50

World Equities (% return GBP)

2.82

1.29

5.62

75.89

10 Year US Treasury Yield (%)

0.57

0.62

1.74

2.24

GBP / USD (fx rate)

1.30

1.26

1.20

1.55

 

As at 7th August 2020. Source: Financial Express

Download the PDF here

 

This publication has been produced by Vermeer Investment Management Limited (VIM) trading as Vermeer Partners. It is provided for information purposes only. VIM makes no express or implied warranties and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to any data included in this publication. VIM will not treat unauthorised recipients of this publication as its clients. Prices shown are indicative and VIM is not offering to buy or sell or soliciting offers to buy or sell any financial instrument. Without limiting any of the foregoing and to the extent permitted by law, in no event shall VIM, nor any of its officers, directors, partners, or employees, have any liability for (a) any special, punitive, indirect, or consequential damages; or (b) any lost profits, lost revenue, loss of anticipated savings or loss of opportunity or other financial loss, even if notified of the possibility of such damages, arising from any use of this publication or its contents. Other than disclosures relating to VIM, the information contained in this publication has been obtained from sources that VIM believes to be reliable, but VIM does not represent or warrant that it is accurate or complete. VIM is not responsible for, and makes no warranties whatsoever as to, the content of any third-party website referred to herein or accessed via a hyperlink in this publication and such information is not incorporated by reference. The views in this publication are those of the author(s) and are subject to change. VIM has no obligation to update its opinions or the information in this publication. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the client who receives it. Any securities discussed herein may not be suitable for all investors. VIM recommends that investors independently evaluate each issuer, security or instrument discussed herein and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results. This material has been issued and approved for distribution in the UK and European Economic Area by VIM.

©2019 Vermeer Investment Management Limited. All rights reserved. No part of this publication may be reproduced or redistributed in any manner without the prior written permission of VIM. VIM is authorised and regulated by the Financial Conduct Authority (FRN: 710280) and is incorporated in England and Wales (company number: 09081916).

Back to News & Insights