Daniel Casali provides a round-up of key market activity during the week of 4th May.
- The Deloitte Q1 2020 CFO Survey suggested that business confidence is at an all time low. 98% of CFOs are expecting to reduce their capital expenditure during 2020, whilst CFOs anticipate revenues to be 22% lower on average compared to pre-COVID forecasts.
- Over 300 UK listed companies have cancelled or cut their dividends. Savers are expected to lose out on around £85 billion as a result.
- In March, US factory orders dropped at a record place due to fractured supply chains and decreased demand. According to the U.S Census Bureau, new orders of manufactured goods dropped by 10.3% - equivalent to $51bn
- Chinese and US relationships took another blow, as the US Secretary of State claimed there was a “significant amount of evidence” pointing to COVID-19 originating from a Chinese laboratory.
- Rishi Sunak is planning to cut the government’s furlough scheme as part of the country’s plan to ease out of lockdown. “People are addicted to the scheme” according to senior source within the government.
- Argentina’s economy minister has suggested that unless investors were open to engaging in talks on how to relieve the country’s financial burden, his government would consider defaulting on $65bn of foreign debt. This would be the country’s ninth sovereign debt default.
- PMI data showed a historic slowdown of global activity as the April all-industry PMI fell 12.7 points to a record-low of 26. This is partially due to the breakdown of the service sector, which previously has softened the blow during recessions. The global services PMI plunged to 24.0 last month.
- Data released by the ADP Research institute showed that in April, ADP private job creation fell by 20.2m. Friday’s US non-farm employment figures are expected to be equally negative.
- The Bank of England has warned that the country could be facing the largest recession on record with the economy on course to shrink 14% in 2020.
- The economic output forecast from the European Commission suggests a 7.4% decrease in output in 2020, the sharpest slump ever.
- In March this year, German industrial orders fell 15.6% and factory sales 11.5% compared to this period last year.
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By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
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This article was previously published on Smith & Williamson prior to the launch of Evelyn Partners.