I hope you are all well.
I would like to begin this week’s newsletter by mentioning an update to Ale and her friend’s philanthropic efforts. They have successfully reached their target and raised £10,000 for Wythenshawe ICU.
They have had discussions with Dr Brendan McGrath of the Wythenshawe Hospital’s ICU and the Manchester Foundation Trust Charity.
The funds will go on a new project developing better aprons and PPE with Manchester Metropolitan University as part of a psychology project exploring staff’s anxieties.
To keep updated with their efforts, please go to: https://emmeviloves.blogspot.com/
Market Update from our co-Chief Investment Officer, Matthew Singleton
As we come towards the end of another week financial markets have now risen 5 out of the last 6 weeks. The recent rises in markets have left many confused as to why and even myself who was optimistic didn’t expect markets to rise this quickly.
Attempting to rationalise the market movements of recent weeks (especially this one given the weekly movements). I point out 2 key things. Going against central banks is a brave move especially given the amount of stimulus that has been injected into the markets. Just yesterday, Christine Lagarde (European Central Bank President) announced that it will increase its emergency purchase program by €600 Billion which is on top of the €750 Billion already committed taking the total to €1.35 Trillion. Eyewatering numbers and further proof that central banks have a significant amount of ammunition. The question is now what will the FED say at their next press conference which is scheduled for Wednesday next week.
The second reason I feel that markets have continued to rise even on negative news is that the market expects bad news/figures in the short term regarding GDP/Jobless claims etc and it’s going to take something really unexpected to shock markets into another downward spike. In the financial crisis we went through a sustained period where bad news was good news because the market took the bad news as “oh well this just means more quantitative easing (QE)”
I do not think we’ll know the actual economic impact of the shutdown until Q4 2020 / Q1 2021 and putting those dates together with the U.S. election and BREXIT trade agreement deadlines. Perhaps we should take stock and revaluate where the market is in the Autumn.
Finally, just as I have finished writing this the U.S. has announced a huge forecast beat on jobs with unemployment down to 13.3% when the forecast was 19.5%. The May gain was by far the biggest one-month jobs gain in the U.S. history since at least 1939. World markets have spiked higher on this news.
Major Market Movements Week to date.
|GBP v USD||+2.5%|
|GBP v EUR||+0.5%|
The thoughts and opinions of our Head of Research, Aidan Briggs.
Mark is currently enjoying a well-deserved break this week. In his place, I would like to provide my thoughts and opinions on the events of this week, how they have affected our economy, environment, and society and how we can positively move forward.
To those who may not know, an individual by the name George Floyd died. Following this, a series of peaceful protests throughout the nation and globally took place in a stance against police brutality and racial injustice.
Social tension, which have been high for a considerable time partly due the 2016 US election and the more recent coronavirus pandemic, has reached a boiling point, fracturing society, and leading to civil disobedience, unlawful rioting, and looting.
If we focus on resolving our social tensions is likely to improve economic outcomes, provide for a healthier and more peaceful environment in which we can fully recognise our shared humanity and celebrate our individual differences.
I truly empathise with those affected although it is impossible for me to fully comprehend what it feels like.
Ray Dalio similarly expressed:
“while I can empathize, I haven’t walked in the shoes of those who are most deeply affected by what’s going on—e.g., I can’t know and feel what it’s like to be Black in America today, to be a policeman on the front lines, to be a leader determining what should be done to deal with this situation, etc., so I encourage you to seek out those who have those perspectives. All I can tell you is what I think from the perspective I have.”
My perspective is one simply as an individual who focuses on providing our investors with peace of mind and supporting them in achieving their goals through financial planning and investment management ensuring for their best possible outcomes.
My instinct when an issue presents itself, is to resolve it as efficiently and amicably as possible.
Beginning with fully identifying the issue, when discussing racial prejudice, it is important to note we have taken many positive strides forward in effort to combat it, however, can we say we achieved equal opportunity for all? If not, how is it achieved?
There will be many thoughts and opinions on these questions, at Daintree WM, when varying opinions form, we openly engage in a thoughtful, considerate discussion putting the end goal and truth above our own individual opinion being radically transparent and honest.
This is where I would begin with the social tensions in the US, I would bring together thought leaders from each perspective, ensure they’re aligned on the same goal (equal opportunity for all), and allow them to engage in thoughtful disagreement.
In terms of actions to be taken, my personal thoughts on what would lead to the greatest positive impact for all perspectives include:
- Increasing police budgeting, to allow for a greater applicant pool for the police force, to allow for better training in confliction situations, and to allow for improving the psychological wellbeing of the police force through psychological evaluations and therapy (if required),
- Increasing education budgeting, studies suggest an underlying cause of civil disobedience stems from inadequate opportunities and poverty. An effective tool for alleviating poverty is education.
- Making improvements in diversity, by adding more diverse thoughts, opinions, and perspectives to conversations at all levels we can make positive economic and social changes.
- A Focus on individual family, As John Boyega said “imagine this: a nation that is set up with individual families that are thriving, that are healthy ,that communicate, that raise their children in love, have a better rate of becoming better human beings and that’s what we need to create”.
I hope and believe we can look back on these events knowing we took the necessary steps to bring humanity together and we lead ourselves to a more prosperous future.
Thank you for reading.
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