News & Insight • Weekly Newsletters

16 October 2020 | William Buckhurst

That Was The Week That Was

MACRO

• The Bank of England has written to all the major UK banks asking for their thoughts on negative rates
• In the US, first-time claims for unemployment benefits totalled 840,000 last week, higher than expected in another sign that the spike in job growth over the summer has cooled heading into Election Day
• It was announced on Thursday that London and other regions of the UK would be moved to a tier 2 level of restrictions from midnight on Friday

STATISTIC OF THE WEEK

Highlighting the difficulties of not just developing a vaccine but also delivering it, a leading healthcare fund this week showed us how the potential size of the delivery is enormous. Just providing a single dose to 7.8 billion people around the world would fill 8,000 (Boeing) 747 cargo aircraft

COMPANY NEWS

• JP Morgan reported results better than expected, beating on the bottom line, and setting aside much lower CV19 reserves than in its two previous quarters
• LVMH enjoyed good quarterly results highlighting strong growth in its fashion and leather goods division
• Randall & Quilter reported good earnings growth and showed its fast-growing program management business entering profitability for the first time

FUNDS

Temple Bar’s new managers RWC show that the UK market is at its biggest discount to global equities in over 30 years and that value stocks stand at a record discount to growth stocks

SMALL-CAP NEWS

Volex updated the market this week saying trading was ahead of expectations and had improved since the AGM at the end of July. They expect H1 sales to be at least $200m and we look forward to reading the print on 12^th November. Another pointer to the trend of consumers upgrading their electrical goods whilst at home. Volex also supplies cables into data centres and electric vehicles and these themes obviously continue to grow meaningfully

THIS WEEK IN HISTORY

1915: The New York Stock Exchange changes the way stocks are quoted. They will now be quoted in terms of dollars per share, instead of percent of par

• 2014: A “flash crash” leads to the most volatile day in US Treasury markets in 50 years. The yield on the US 10-year note fell 34 basis points from 2.2% to as low as 1.86% in a matter of just minutes. The sharp turn lower began at 9:34 am, and yields had recovered by 9:45. 

IT ALL ENDS IN TIERS

In perhaps the true tragedy of Coronavirus, Nestle announce that disruption caused by the pandemic means that Quality Street were unable to produce the hotly anticipated new light blue wrapper chocolate caramel brownie. Fans are concerned that this could be the first Christmas where the Quality Street tin looks set to be one flavour short of the full range

MARKET DATA

% returns	1 Week	1 Month	1 Year	5 Years
UK Equities (% return GBP)	-1.84	-2.94	-16.68	9.79
World Equities (% return GBP)	0.24	2.28	12.51	95.82
10 Year US Treasury Yield (%)	0.75	0.69	1.75	2.04
GBP / USD (fx rate)	1.29	1.30	1.28	1.54

 As at 16^th October 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).

---

Key Points

•