The week of 14 April saw mixed market sentiment as the impact of the COVID-19 weighed on corporate earnings results and economic data releases, while further talk of exit strategies and progress on a possible treatment provided some relief.
The key indicator being monitored remains the growth in infections around the world as that will indicate if countries are getting the virus under control and potentially how long they will remain in shutdown. While it is encouraging that governments are looking to end the lockdown, we continue to believe economies will struggle to fully reopen in the short term.
EU leaders will be holding a video conference this Thursday to discuss their response to the pandemic, and in particular with regard to the recovery fund. This meeting is important given the recent spread widening seen in Italian government bonds over German bunds.
The second round of Brexit negotiations takes place this week – also via video conferencing – with the UK government reiterating that they will not extend the transition period.
Alongside the weekly US jobless claims data published on Thursday 23 April, this week also sees the release of April purchasing manager indices from a number of countries around the world. These flag the levels of stock that managers across all sectors of the economy are buying to use in the month ahead – the lower the number (below 50), the bigger the contraction expected.
88 companies in the S&P 500 are set to report Q1 results. Meanwhile, close to 50% of UK companies have now suspended their dividends – not necessarily because they think they might fail, but instead as a precaution against the unknown. This figure should also be viewed versus the dividend suspensions in our investment trusts – with just two of the eleven putting them on hold.
We continue to see positive investment flows into our strategies given the long term numbers remain solid.
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Clients of Nedbank Private Wealth can get in touch with their private banker directly to understand how their portfolios are responding to market events, or call +44 (0)1624 645000 to speak to our client services team.
If you would like to find out more about how we manage clients’ investments, please contact us on the same number as above. Or you can get in touch using the links to the forms towards the end of this page.
Investments can go down, as well as up, to the extent that you might get back less than the total you originally invested. Exchange rates also impact the value of your investments. Past performance is no guide to future returns. Any individual investment or security mentioned may be included in clients’ portfolios. They are referred to for information only and are not intended as a recommendation, not least as they may not be suitable. You should always seek professional advice before making any investment decisions.
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