Good morning and I hope you all enjoyed the weather over Easter, now that everyone’s garden is planted, mowed, painted and ready to sit out in.
As we are now seeing what is hoped to be the peak of the impact of this virus, I am mindful that one or two of you may now be close to someone who is indeed suffering from this virus and my thoughts are with any of you that are affected either directly, or indirectly, at this time.
This weekend saw some interesting outcomes in terms of reducing case figures across the globe and, in some countries, a relaxing of lockdown measures, all of which is good from a health and economic perspective.
In the UK, it appears that we are expecting to be told later this week that we will be on lockdown measures for a further 3 weeks, with a divided camp in government on this matter. Over in the United States, Mr Trump issued his state address yesterday and indicated that they are very much going back to business and sooner, rather than later, with lockdowns lifting possibly as soon as May 1st.
Given the forecast for United States GDP reducing by as much as 30% from the initially indicated 8% , it is understandable that they are deeply concerned about the impact on their economy and with this in mind, they do appear to be taking a very different and more direct approach from that of other countries, the possible exception being Sweden, which is very much the ‘control’ experiment in all of this.
In terms of investment markets, there does appear to be some light appearing at the end of the tunnel, although there will still be a lot of work to do in terms of returning to normality, even after all of this has passed. Therefore whilst we are not seeing too much negative movement within sharemarkets presently, in fact quite the reverse, some volatility is still anticipated.
The ‘other’ side of the investment markets, such as government and corporate bonds and the ‘lower’ risk investment sectors, have seen a very positive recovery during the past week or so and hopefully this trend will continue and be reflected within your own investments.
There is still much for the UK government to do, not least in getting actual funds to cash-starved businesses and their furloughed employees (and of course the self-employed sector), but I am sure we will see pressure being exerted by the Chancellor, specifically within this area, during the week and it cannot come soon enough for many.
The article below provides some fairly hefty/heavy insight into the working of the various types of bonds (some are overseas as well as UK) and if you have any questions in relation to any of the content, please let me know!
https://www.pimco.co.uk/en-gb/marketintelligence/bond-basics/what-are-bonds