Welcome to another Friday bulletin which I hope finds you safe and well on this sunny bank holiday Friday.
Most people seem to be finding that time in lockdown passes quickly and this has been a shorter week than most. Today both here in the UK and in many other European countries, we celebrate “Victory in Europe” in 1945, marking what remains one of the most significant events in British modern history. With many having socially distanced VE-Day street parties in celebration, it seems that people are continuing to find ways to adapt to life in lockdown.
In this week’s bulletin you’ll find our usual market update, plus news from Bloomberg about potential new treatments for Covid-19.
Financial Markets Update
This week after a short, sharp decline on Monday morning, US and UK markets recovered ground, with the FTSE 100 marching steadily back towards the 6,000 level. Despite some dire economic warnings emerging as GDP figures for Q1 began to be announced, it seemed that markets were buoyed by a potential start to easing lockdown measures, choosing (for once) to focus on the positive not the negative.
So far governments around the world have given unprecedented financial support to companies and individuals to help them survive this period of economic hibernation. However, many businesses remain closed for now, or at least operating under a significantly diminished capacity, meaning that much of this fiscal support and stimulus remains dormant and unable to make its presence felt. The hope is that ‘pent up demand’ from consumers, for products and services that have been made unavailable to them during lockdown, will fuel a sharp V-shaped recovery. However, for now we cannot tell whether this will become a reality until lockdown measures are significantly relaxed and the economy – and life in general – begins to return to normality.
Sources suggest that a significant announcement is due in the UK this coming Sunday. Whatever the next steps, it is likely that the government will take a cautious, slow and steady approach to releasing lockdown and social distancing measures. It is also likely that ‘normal’ will actually be something new and different to what it we have previously known, as the impact of lockdown lingers and potentially influences the behaviours of businesses and individuals, in some cases temporarily and others perhaps with more permanence.
Fortunately for us as investors, for now at least, markets are benefitting from the global monetary infusion and seem to be focussing on the potential for positive economic growth at a more distant point in the future.
Vaccines; a Long and Winding Road
As the Covid pandemic rages, the world’s scientific community is working hard to find a vaccine. Here in the UK Health Secretary Matt Hancock confirms that more than £40m has been made available to projects being run by Oxford University and the Imperial College of London, claiming that the UK is ‘at the front of the global effort’.
An agreement with the World Health Organisation meanwhile has brought together various nations and global organisations, including the UK, France, Germany and Italy, with a combined mission to search for treatments and share their research for the good of all. Some scientists working on the vaccine have begun human trials and it is claimed that they may know within six weeks if this may prove viable to take forward.
The actual mass roll-out of a vaccine may take significantly longer however. This week Bloomberg published an interview with Rajeev Venkayya, President of Global Business for Takeda Pharmaceuticals, who are reportedly one of a number of key pharmaceutical companies leading the way with Covid-19 research. Venkayva rebuffed Donald Trump’s recent claim that ‘we’ll have a vaccine by the end of the year’, suggesting it could be considerably longer. It is reported however that trials by Takeda to create a plasma formulation that could help treat Coronavirus sufferers are going well. The treatment potentially delivers a strong boost of anti-bodies effective against Sars Covi2, which causes Covid. If successful it has the potential to improve recovery rates significantly and could be made available by the end of the year.
You can watch the interview in full by clicking here. (Just a short watch - 7 minutes long)
Clearly the road to a true vaccine that can be made widely available is going to be a long and twisting one, but with the world’s nations and scientific community working collaboratively it seems that progress is being made.
