17 April 2020
A weaker pound helped push the largely dollar earning FTSE 100 into positive territory on Thursday (16 April) in what was a relatively buoyant day for European markets. London’s leading index ended the day up 0.55% at 5,628.43.
The keenly watched Rightmove House Price Index, published on Monday (20 April), will give investors a good idea of how Covid-19 is affecting the housing market. March data showed seller asking prices to be at a record high. The Office for National Statistics (ONS) will publish unemployment data for February on Tuesday (21 April). The latest British Chambers of Commerce’s new Coronavirus Business Impact Tracker will reveal on Wednesday (22 April) how UK firms are coping with the coronavirus. On Thursday (23 April), the ONS publishes its latest sales data for the retail industry. On Friday (24 April), GfK’s will release its latest Consumer Confidence Survey, which provides valuable insight into household finances and spending.
SECTOR IN FOCUS
The UK government came under renewed pressure to offer a financial bail-out to the nation’s aviation industry this week after US officials rubber-stamped a $25 billion rescue package. Lobby groups acting on behalf of British airlines and airports have called for more financial support from the government to see them through the crisis. That said, UK budget airline easyJet (EZJ) this week claimed it had enough cash to survive another nine months with its planes grounded after cutting costs and securing new loans. Meanwhile, Michael O’Leary, the chief executive of fellow low-cost carrier Ryanair (RYA), predicted a fierce price war after the lockdown that could see plane fares tumble.
Inflation has been below the Bank of England’s 2% target since last summer, and that is unlikely to change when the Office for National Statistics reports its March data on Wednesday (22 April). Many economic commentators believe the coronavirus crisis could have a temporary dampening effect on prices, although they are expected to spike again once the economy gets back on its feet.
Unlike life insurance, non-life insurance – such as commercial insurance - is often required by law and tends not to be a discretionary purchase, meaning it usually less sensitive to what is going on the wider economy. Polar Capital Global Insurance Fund R Acc GBP (IE00B4X2MP98) invest in non-life insurers from around the world and therefore may be a sound option if you are looking for a more defensive option for your portfolio.
21 April – Investors are bracing themselves for a tough read when Associated British Foods (ABF) reports its interim results on Tuesday (21 April). In a trading update earlier this month, the multinational food and retail group, which owns budget fashion brand Primark, warned that full-year earnings “would be much lower than envisaged” as a result of the coronavirus.
22 April – Fresh from a £166 million emergency fundraising round to get it through coronavirus, WH Smith (SMWH) is another firm finding life difficult under the government lockdown. Investors will want reassurance on Wednesday (22 April), when the firm reports its interim results, that the board has put in appropriate measures to mitigate against the worst effects of the crisis.