I hope that you all had a good weekend and enjoyed some of the good weather we are having.
As we near the eye of the storm with the virus, I would prefer to focus on financial market matters rather than people’s behaviour, as I am sure this is an emotive enough subject already.
At the end of last week, we saw oil prices start to increase in the hope of an agreement between Saudi and Russia, but their planned meeting for today has now been deferred until Thursday, so there remains uncertainty as to how it will proceed. One this is for sure, not much is getting used at present anywhere (well other than China maybe!) and so a need to scale back on production is needed.
In terms of investment markets, shares have rebounded well today on news that cases of the virus recorded globally (and more particularly, the death rates from this) are falling slightly; furthermore, there is a real focus on the need for countries to restart their economies again, not least to insulate them financially from the situation where this may happen again anytime soon (God forbid!). Perhaps the catalyst for this has been the increasing lack of confidence in Government Bonds and other securities, but I would like to think that it is because the plans are working and countries starting to see light at the end of the tunnel.
Again, we seem to be witnessing poor behaviour on the part of Banks, with news of rates on the government-backed loans to businesses (raised by banks at around 0.1%) being offered at interest rates of up to 8%. This has meant that uptake has been slow from better-equipped businesses, as they do not want to take on more debt at what are unacceptable prices. Consequently, we may see some tough decisions being made this week and next by these same businesses (cutbacks?) and with funds required for paying furloughed employees still not in sight and not expected for some weeks to come, the government still has a lot to do to convince many commentators.
So, with sharemarkets rallying so far today and hopefully a focus on returning to work ahead, the sooner we can overcome this virus and its impact on our lives, the better, but in spite of the good news to start this week, there are still some hurdles ahead and there remains a need for government to step up to the plate with funding for those who are hardest hit in all of this; the majority of the UK workforce!