Market Update & Good Financial Housekeeping Part 2 - COVID-19

We hope this finds you well and that you have adapted to lockdown life.

Thankfully, Mother Nature is rewarding us with some fine weather for this sustained period of low emissions and worldwide pollution.  Who could have thought a pandemic such as this would have driven such a rapid change to improving our environment in such a short space of time?  With Jellyfish in Venice where the waters are now clear….it could be dolphins in the Clyde next!

In the last 6 weeks, we have experienced some extremely turbulent times in financial markets, as well as in our personal lives, as a result of the COVID-19 crisis which has led to many questions and some concerns from investors. As such, we appreciate that this is an incredibly important time for us to keep you informed and to provide as much information and knowledge as possible to help you remain calm and focused on your objectives.

In recent weeks, governments and central banks worldwide have introduced a raft of fiscal and monetary stimulus measures to help limit the economic impact of the COVID-19 pandemic. However, until there is materially good news on efforts to combat the virus itself, we can expect sentiment to remain fragile. Significantly, the price of US oil turned negative for the first time in history on Monday, with demand for oil drying up as lockdowns globally have kept people inside, exacerbated by a recent supply glut. With so much uncertainty about the timing and shape of the recovery, we can expect volatility to persist for some time yet.

I took a call from the Aberdeen Standard Investments Research Institute today which was very insightful and with some POSITIVE news, some of which I thought was worth sharing :

There were 3 specific areas covered:

  1. What they learned from the corona virus shock following the release of China’s Q1 GDP data?
  2. What their economic indicators are telling them about the Chinese recovery?
  3. What it says about the prospects for getting back to business…..there could be lessons here for other countries.

 

Q1 GDP data:

  1. The official GDP number came out as a quarter on quarter fall of -9.8% and the first time we’ve seen a quarterly fall in Chinese GDP data.
  2. The number was close to consensus and a bit below the -14% quarter on quarter number that was expected, but overall, the number seems credible.

 

The recovery path:

  1. The official monthly data suggests it could be a very rapid recovery in the industrial sector, the growth in March almost going back to the levels of activity experienced in January.
  2. The monthly numbers suggest fixed asset investment (real estate, infrastructure, machinery etc) remain 10% below January level, recovering from 20% down in February.
  3. The retail sector has recovered from a 50% fall in February to just over 20% down in March when compared with the January level.
  4. Chinese exports did recover to their January levels in March although other industrial data does cast a bit of doubt on the official production figure.

 

Getting back to business:

  1. The magnitude of the drop helps provide some guidance on what to expect across other economies from around the world in Q2, particularly some who have experienced more extensive lockdown measures.
  2. China appears to be getting back to business, travel is still restricted and they’re also cautious of a second wave of the virus which would see a reintroduction of more restrictions moving forward.

*** Good Financial Housekeeping Part 2 ***

 

Why Make a Will or Power of Attorney ?

The ongoing pandemic has served as a reminder of the importance of planning for the future and having your affairs in order. The lockdown has also unfortunately highlighted the practical benefits of parents or older relatives having a Power of Attorney.

Attached is a Summary on Wills and Power of Attorney, which explores some of the many reasons why you should consider setting up both a Will and Power of Attorney.

Continue to keep safe, sane and well…..and remember the sunscreen!

Summary on Wills and Power of Attorney - Click Here