Please find below our Investment Market Update as at 30th June 2020.
Blue Sky Investment Market Update
Boris the builder!
Yesterday Boris Johnson announced that he is shortly going to be providing details of a multi-billion deal for infrastructure projects to help stimulate the UK economy. As we know he has a habit of repeating himself and he didn’t disappoint, promising to “build, build, build”.
I’ve spoken at length about the avalanche of money we expect to be committed to infrastructure projects across the world, and here is yet another example. The UK government intends spending £5bn on hospital maintenance, school rebuilding programmes, road projects and ‘local’ growth plans.
He’s compared himself to Churchill, and now Roosevelt
We know Boris Johnson holds Churchill in high regard and in his speech yesterday, he suggested that his measures will be Rooseveltian, in reference to Franklin D Roosevelt, the US president who led the country out of the Great Depression.
I’ve previously written about the Great Depression and the differences to today’s downturn. It is easy to see that without speedy intervention and effective stimulus, history could repeat itself.
One of the big issues then was that the authorities were slow to act in stimulating the economy. Very different to what we are seeing unfold in this crisis. Ultimately, the huge commitment to infrastructure spending was what got the US back ‘on track’ towards the end of the 1930s and the same pattern is being followed today from the developed nations around the world. The key point is that they are responding more quickly.
I’ve talked at length about investing into infrastructure, yet it’s much more than road building, maintenance and rebuilding programmes. The term infrastructure is so broad reaching and therefore we thought it would be a good idea to explore some of the dynamics unfolding in this space and organise another one of our webinars for the 15th July at 10.30am.
I will be interviewing Nigel Aitchison from Foresight who will walk you into the fascinating world of infrastructure. Nigel will take you on a journey of discovery and enlighten you to the opportunities unfolding in this space, particularly around innovation and sustainability. Some things you’ll have never even thought of!
Nigel is very easy to listen to and I can assure you it will be worth 30 mins of your time. Nigel is a partner at Foresight and is their Head of Infrastructure.
Please register your interest by clicking the link below. Family and friends are welcome, just forward this email to them so they can register for the seminar and we can provide Zoom details straight to them.
There is a lot going on, although judging by the equity markets you wouldn’t think so. Equities are largely ‘stuck’ in a void as the markets try and work out which way to move next.
There are continuing spats between India and China, the US and China, and recently Europe, UK and China which are unsettling, but the immediate concern is now the possibility of a second wave of Covid-19. The World Health Organisation has warned that the worst of the pandemic is still to come because of the lack of global solidarity.
Parts of the world are having to scale back their transition out of lockdown and in some countries, they are having to reimpose restrictions. The extent to which these measures work will determine the prospects for local economies. The big concern at the moment, is that certain US states are experiencing new waves of cases and being the world’s biggest economy, the dynamics are being watched carefully.
On saying this, other countries like Germany have seen their infection rate hold below 1.0 for the sixth day running and weekly deaths in England and Wales fell to their lowest level in 12 weeks.
Most of us have got more money!
It won’t come as a surprise I’m sure, to hear that spending across UK households has fallen significantly and as a result, the level of savings have increased. Households saved more of their disposable income in the first quarter than at any time for 3 years.
However, if my household is anything to go by, this surplus is rapidly being eroded by domestic projects which, until lockdown, were firmly on the back-burner!
Have a good week.
Gary and the Investment Team
Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.