Weekly Client Update – 4th August 2023

Markets Overview

The world’s financial markets have had a mixed performance this week. In the U.S., stock markets have been a bit unpredictable. The Dow Jones Industrial Average and S&P 500 saw gains on Wednesday, while the Nasdaq Composite experienced losses throughout the entire week. Meanwhile, markets in Europe and Asia have remained relatively stable.

Investor confidence has been influenced by ongoing events like the conflict in Ukraine and the increasing cost of goods and services, known as inflation. Additionally, the decision by the Federal Reserve to raise interest rates is adding to the challenges faced by stock markets. It’s crucial to remember that global markets can change rapidly and can be uncertain.

Here are some key highlights about how the major stock indexes performed this week:

  • Dow Jones Industrial Average: It went up by 0.27% on Monday, dropped by 0.52% on Tuesday, surged by 0.70% on Wednesday, and showed a 0.47% increase as of 08:07:50 PST on Thursday.
  • S&P 500: Monday saw a rise of 0.34%, followed by a dip of 0.92% on Tuesday, a modest gain of 0.09% on Wednesday, and a slight increase of 0.02% as of 08:07:50 PST on Thursday.
  • Nasdaq Composite: It started with a slight 0.03% increase on Monday, but faced a significant drop of 1.54% on Tuesday, followed by a 0.63% decrease on Wednesday, and a notable decline of 2.05% as of 08:07:50 PST on Thursday.

Here are the key factors influencing global markets this week:

  • The ongoing conflict in Ukraine is causing uncertainty worldwide and affecting how investors feel about the economy.
  • Inflation is on the rise in many countries, impacting both businesses and consumers.
  • The Federal Reserve is raising interest rates to manage inflation, which is also putting stress on the stock markets.

Given the fast-changing nature of global markets, it’s always a wise choice to consult with a financial advisor before making any investment decisions. Stay informed and make decisions that align with your financial goals.


The Bank of England has raised interest rates for the 14th successive time, lifting its official rate to 5.25%.

Latest forecasts from the Bank say the UK will avoid recession and suggest the government is likely to meet its pledge to halve inflation by the end of the year but interest rates will have to remain higher for longer. The quarter percentage point increase was somewhat smaller than some economists had expected, following the release of lower than anticipated inflation data last month. “Inflation is falling and that’s good news,” said the bank’s governor Andrew Bailey. “We know that inflation hits the least well off hardest and we need to make absolutely sure that it falls all the way back to the 2% target. That’s why we’ve raised rates to 5.25% today.”

However, while the Bank’s forecasts do not imply a recession in the coming years, they paint the picture of an economy which is both weaker than previously forecast and effectively flatlining all the way through to 2026. This is, said the Bank, in large part because of the fact that interest rates are expected to remain at high levels for considerably longer than markets previously anticipated. Mr Bailey acknowledged higher interest rates were “difficult” for many – but defended hiking them as necessary to bring down inflation .He said: “It is tough, and I’m very conscious of that… I’m very, very aware that this is difficult for households. But we’ve got to get inflation back down to target. “I think it will come down quite substantially by the end of the year – it won’t be back to target, we’ve got more to do next year, and we will do it, but it’s on the way down now.” Mr Bailey said it was “too early” to make predictions about when rates would be lowered, but said the Bank had several choices over how to achieve its 2% target. Options included keeping rates at the current level for several years, or by raising and then lowering them in a shorter timespan, he said. The governor said: “Interest rates are having their effect… They are restricting inflation, bringing it down. “On wage setting, Mr Bailey added: “It’s not consistent currently with the 2% target, because we’re not at the 2% target at the moment. It’s going to need to come down.”


Sustainable Investing on the rise – but knowledge and guidance are key

The concept of investing ‘sustainably’ is undoubtedly on the rise. Although it’s been a widespread concept amongst professional and institutional investors for some time, it’s now moving much more into the mainstream, with investors increasingly choosing sustainable funds as part of their wider financial planning, whilst also helping to find a way to create a better world. There is good reason for this, the global population is expected to reach 9 billion by 2045. As people live longer, it stands to reason that more people will be affected by the way nations are run, the state of our environment and the wellbeing of the people in it. It’s all about the sustainability of the planet communities. The fact that investment can help sustainable companies develop, innovate and grow. It’s not only about investing in the own future – it’s about investing in positive change and progress too.

However, for some people, the idea of investing sustainably can be a bit daunting, so demystifying the world of sustainable investing is important. Essentially, sustainable investing allows you to invest in companies that are better managed from an environmental, social and governance perspective. From tackling climate change to equal rights and animal welfare, it’s possible to choose investments based on specific personal values, in a way that could also help you achieve your long-term financial goals. Sustainable investing also recognises that companies which aim to address environmental and social challenges could be those best positioned to grow, meaning that, although all investments carry an element of risk, it’s absolutely possible to invest with a conscience and make a profit at the same time

Sustainable investing, in all its guises, is becoming more mainstream and solutions are more accessible than ever before but it’s important too to have a diversified portfolio. ’‘Having conversations with experts will help demystify this area and give you confidence in knowing what is right for you in terms of risk, returns and alignment with your own personal values.’ Ethical investing, for instance, actively avoids companies or industries that have a negative impact on society and the environment. This is called negative screening. ESG investing, meanwhile, actively selects companies that manage their environmental, social and governance risks well and create value for stakeholders. It’s less restrictive than ethical investing, as it considers companies that are adapting, such as oil companies that invest in clean energy. And impact investing actively selects companies whose positive impact on the world can be measured. For example, those who generate a specific amount of recycling or save a certain amount of water. Understanding the subtle different meanings and approaches can be a useful starting point to navigating the world of sustainable investing.


Jersey’s mail plane delivers for the final time

For more than eighty years, letters and parcels have been delivered to the island each weekday on the mail plane. The final flight NTP023 arrived this morning at 7.00am. From Monday, the mail will be transported by boat, after a decision by the Royal Mail and Jersey Post to scrap the service.

A Royal Mail spokesperson said “the provision of the aircraft is no longer commercially viable” and a pre-existing ferry service would instead be used. There will no longer be a next day delivery service as a result. Royal Mail said the move would reduce costs “amid a steady decline in letter volumes” and help the company work towards a 2040 net zero target. The decision followed a public consultation to which 25 people responded. Jersey’s government wrote to Royal Mail to share the concerns. A petition calling for the States to save the mail plane was signed by nearly 1,500 people. Ministers responded by saying that it would “have almost no impact on inbound deliveries”. The first flight landed at Jersey airport on 1 June 1937 at 09:00.


Jersey’s ‘worst summer in 20 years’ is ‘devastating’ beach cafés

Beach cafés and kiosks have had to close, send staff home and lose much-needed revenue as the Island experiences its ‘worst summer in 20 years’, owners have said. While last summer ‘felt like Saturday every day’ for these businesses, low-pressure weather systems off Jersey’s shores are this year causing ‘devastation’ and low customer numbers. With 38.7mm of rainfall on 1 August, there has already been more rain this month than in the whole of last August (33.3mm), which also saw a hosepipe ban. There are fears that a poor summer season could have knock-on effects on tourism, survivability during winter seasons and fewer hours for staff, some of whom are temporary workers from outside the Island. Mary Tunney, who runs Mad Mary’s Bouley Bay Beach Café, said it was ‘absolutely shocking’ and the ‘worst summer in my 20 years of running the café’. ‘In fact, we’ve not even had a summer,’ she deplored. Tourists who had visited her café earlier this week spoke about their ‘devastation’ at the weather, which had forced them to alter their camping holiday. ‘Everyone worries about staff too,’ she said. ‘I’ve recently raised the wages for my staff because I want them to be happy at work. ‘It’s so miserable when we have the staff, we have all our cakes baked and only five customers come in, ordering maybe two cups of coffee each. ‘If I have food left, I’m giving it away for free to those who want it,’ she added, while encouraging Islanders to visit. ‘I rely on busy summer months to get me through the winter. I want to be open.’

Freddie Faulkner and Aaron Cowen, at Kismet Cabana in Ouaisné, said they were cancelling and postponing events which would had been due to take place on the beach during warm summer evenings. They said: ‘We’re looking at moving summer events to September and October, which is weird. ‘The weather is certainly affecting us because we should be busy now that we’re in the summer service, but the wind and rain are causing us to lose customers in the morning and the afternoon. Last summer it felt like a Saturday every day of the week. ‘That will have a knock-on effect in winter, because summer is our biggest hit and we run off summer throughout the rest of the year. We bring in extra staff to be ready for the busy months, so we have 13 staff on full-time wages. We have to send them home. ’Ian Carr, director of Jersey Luxury Ice Cream Company which operates vans all around the Island, said: ‘I can’t remember a summer as bad as this. There were six days in July when there was hardly any trade or zero trade.’ Yesterday, when force-eight winds were battering the Island’s popular tourist spots, such as the Five Mile Road and St Ouen’s Bay, Mr Carr said he was ‘closed everywhere’. But Martin Nduta, a forecaster with Jersey Met, said there was a glimmer of hope on the horizon. He said that while another low-pressure system would form after the current one had passed through, meaning this wet and windy weather would stick around for the weekend, the weather would ‘significantly improve’ next week.


Bursaries for farmers ‘show King’s support for agriculture’

New bursaries to support future farmers have been announced by the Lieutenant-Governor to mark the coronation year of King Charles III. The bursaries cover up to 100% of fees and living expenses for Islanders wanting to study agriculture or horticulture, in a move which reflects the King’s ‘love of farming and the countryside’. Announcing the new funding yesterday, Vice-Admiral Jerry Kyd said: ‘His Majesty is very keen on agricultural sustainability, homegrown produce and supporting the farming community in the round. Therefore, we are very proud and pleased to be able to offer this support to some Jersey harvesters and Jersey people because we think that, in many ways, the sector can sometimes be forgotten, and it is very much part of the culture and the history and heritage of the Island.’ As well as being intended to show the Crown’s support for these sectors, the bursaries are designed to help improve the Island’s food security and promote the international reputation of the Jersey cow and Jersey Royal potato.

They are available to any Jersey resident, and can be used for programmes ranging from short-term to four-year training programmes. They are expected to be available from September 2024. Jersey Farmers’ Union president Peter Le Maistre said that since he had started farming in 1974, the number of family farms had dwindled from ‘around 700 or 800 to only 30 or 40’. He added: ‘I think there is a growing feeling that there are young people out there who might be interested in a career in agriculture.’ Meanwhile, Master Farms is also launching an apprenticeship scheme, aimed at a young person who would join them for a year with the option of continued employment or training afterwards. Jamie Ribeiro, who started the organic farm Bloom’n Goodness together with his partner, Anna Houiellebecq, earlier this year, said that there were almost no opportunities for training in Jersey for organic farmers.


Passengers left stranded on three easyJet flights at Jersey Airport due to high winds

Passengers on three easyJet flights which landed at Jersey Airport on Wednesday afternoon were left unable to disembark as high winds ‘temporarily stopped all aircraft handling’ amid safety concerns. Passengers on one Liverpool flight and two Luton flights – which all landed between 1.30pm and 2.30pm on Wednesday afternoon – were unable to get off their planes. A spokesperson from Ports of Jersey explained: ‘Winds have been gusting to 50 knots at the airport and Swissport’s operational limits are 40 knots, so the ground crew temporarily stopped all aircraft handling until it was safe to operate. ‘These operational limits are in place to protect the safety of passengers, staff, and equipment. A passenger on the Liverpool flight said that passengers had not been given any information as to when they could expect to disembark.


‘You could be making the difference between life and death’- Jersey Coastguard shares safety advice

Islanders are being warned to avoid rip currents and reminded to call 999 if they see someone in trouble in the sea, as their actions could be ‘the difference between life and death’. The advice follows World Drowning Prevention Day, recently marked by Jersey Coastguard, which saw officers share sea safety messages and highlight the important role of lifebuoys around the Island. RNLI lifeguards – who patrol Grève de Lecq, Plémont, St Brelade and St Ouen – recorded 329 incidents last year. During that time they responded to people caught in rip currents, which are strong currents that flow out to sea from the shore. During the first half of this year Jersey Coastguard has responded to 86 incidents, 26 of which involved helping people out of the water.

Jake Elms, lead lifeguard RNLI supervisor, said: ‘The rip currents are pretty strong at the moment – we’ve not been doing too many rescues as the weather has been pretty shocking, but [with] the next heatwave, if there’s a bit of surf, there will be a lot going on.’ He explained that St Ouen’s Bay was one of Jersey’s rip current ‘hotspots’. ‘We have put signage out in the worst areas just warning people where it is not a safe place to swim. ‘We would like to remind people to swim between the red-and-yellow flags – which is the area marked out as the safest for swimming. If you need any information on how to stay safe at the beach, or for updates on the conditions, please speak to our qualified lifeguards, who are always happy to help,’ he added. As reported by the BBC, an inquest into the deaths of two children at a beach in Bournemouth earlier this year heard that they were thought to have been caught in a rip current near a pier. Coastguard and vessel traffic service officer Luke de la Haye said: ‘There are many things we can all do to minimise the risk of drowning, and if you are worried about someone who’s in trouble in the water, just call 999 and ask for the Coastguard. We investigate all reports we receive, and you could be making the difference between life and death.’


Call for Islanders to volunteer at Battle of Flowers

Volunteer stewards are being sought for the forthcoming Battle of Flowers parades. The battle was revamped in 2022, now this year kicks off with the Grand Day Parade on Friday 11 August, followed by the Moonlight Parade the following evening. As well as the new parade timings, this year’s battle will have a strong musical theme, with four local musicians coming together as ‘The Beantles’ to mark the 60th anniversary of The Beatles’ tour to the Channel Islands, alongside the Caribbean sounds of Flagz Mas, regulars at the Notting Hill Carnival in London. The Moonlight Parade will conclude with a light display from 100 drones flying above St Aubin’s Bay. Stewards aged 18 and over are sought to work on both parades, and must be physically fit as the roles require long periods of standing and walking.

Organisers are also seeking ticket scanners, aged 16 and above, to greet those arriving at the arena and help to clear the crowds after each parade. Battle chairman Russell Labey said: ‘Battle couldn’t happen without our amazing volunteers, and we are looking to expand our crew with people of all ages, whether they are battle-hardened veterans or fresh-faced recruits.’ Volunteers can step forward for either parade, or to work on both days, and must also be available to attend a training session next Wednesday evening. As well as getting free entry to the parades at which they volunteer, and a high-vis gilet, those who step forward will be offered £30 per parade towards their expenses. Anyone interested is asked to email people@battleofflowers.com or visit battleofflowers.com/work for more details.


Deadline extended for Jersey International Air Display sponsorship

This year’s Jersey International Air Display is still up in the air, despite the organiser saying they received a number of pledges of sponsorship money over the weekend. Former Deputy Mike Higgins, who has run the event for the past 23 years, said on Friday that he was days away from cancelling this year’s event, which is due to be held on Thursday 14 September. This is because, he says, of the uncertainty caused by the government’s decision to change the way it allocates its annual grant. In March, the government said it would put next year’s funding out to tender and invited ‘expressions of interest’ from would-be event organisers. Four potential organisers, including long-time incumbent, a not-for-profit company called Jersey International Air Display Ltd, led by Mr Higgins, have applied. However, this year’s display is still being run by JIAD.

Mr Higgins said previously that he was still £75,000 short and called for financial support from sponsors. He said yesterday that he had received ‘a number of £5,000 pledges’ but was still short. Remaining optimistic, he said that he had extended the deadline – when a decision has to be taken on whether to go ahead or not – A final decision will be made today. He said: ‘We are especially appealing to those companies who benefit from the air display or use it to host various corporate hospitality events on the day for their clients and/or employees, to come forward to help fund it. The government has given JIAD Ltd a £40,000 grant this year, awarded through Ports of Jersey. It says that, in making this offer, it was clear that any other money required to stage the display would have to be raised by sponsorship and commercial agreements.Aircraft already booked for the show include the Red Arrows, the Battle of Britain Memorial Flight, the French Air Force National Aerobatic Display Team, the Patrouille de France, and the RAF Parachute Display Team, the Falcons.