Weekly Client Update – Friday, 05th February

In Jersey as part of stage 2 of ‘reconnection’ non-essential shops opened their doors to welcome customers once again after a 6 week closure. Hairdressers and other close contact businesses will open next Wednesday and one week later the Government will release their plans for ‘stage 3’ to commence, where it is expected that employees will be told to return to work providing distancing and other protective measures are maintained. The Hospitality industry and sports clubs will also be hoping for positive news as to when they can reopen their doors. Hotels and restaurants are likely to be allowed to open first with restrictive measures in place, whilst Gyms and Hotel Spas etc look like having to wait a while longer before they get the all clear to reopen.

In Jersey the number of COVID-19 cases continues to fall with 72 cases as of today and 3 in hospital, the lowest in several months. While in Guernsey there are no signs to the end of Lockdown as cases continue to increase. A further 17 new cases were found today with 2 people having recovered bringing the current total to 361 with 6 in hospital.

The Health minister Richard Renouf has confirmed that the more transmissible Uk variant of Coronavirus has been detected in Jersey. Of the 30 samples which had been analysed, 4 had tested positive for the strain. He added that since evidence of the new strain had been present in the UK, health authorities in Jersey had begun to proceed on the basis that the variant was already in the Island.

Meanwhile the Vaccine rollout continues to exceed the target as Jersey health authorities remain on track to vaccinate all over 50’s by 29 March. Programme leader, Becky Sherrington said she was delighted with the progress made so far and revealed that the possible reasons why some islanders might exercise the right to decline the Vaccine will be analysed. All households in Jersey are to be surveyed in an effort to learn more about why some people might decline a coronavirus Vaccine the Government has confirmed. As of the 31 January 14,838 islanders had received at least one vaccination with some 3,131 having received a second. Care home visits have also been allowed to re start, although these are limited to one per week for residents who have received one vaccination to 2 visits per week provided the care home resident had received their second vaccination. 

The Island’s deputy medical officer of health Dr Ivan Muscat said that the roll out of the Vaccination programme should also start to put downward pressure on case numbers although he could not predict exactly when this would take effect. Officials also urged all islanders, including those who had received  vaccines to continue to follow guidelines about hand hygiene, gatherings and social distancing while the roll out continues.

This week’s highlights

  • Financial Shares up
  • Oil price finally above $56 a barrel
  • Bezzo steps down from Amazon
  • Bank of England rates held
  • Space Travel test flights to resume

Everything can have silver lining but now it will cost you more as silver makes big gains

News Update  

UK stocks enjoyed a positive start to the week, with the UK100 up 0.9%. Precious metal miners Fresnillo and Polymetal International were among the best performers adding 9% and 5.1% respectively, on the back of the surging price of Silver. Both Silver and Gold have had a good week with the former reaching a 6-month high.

JD Sports Fashion stock rose 7% after announcing a $495 million deal to buy Baltimore-based streetwear retailer DTLR Villa. The deal is the second US acquisition for JD, after the firm bought California-based Shoe Palace for $325m in December.

The pandemic continues to plague some sectors with insurer Prudential, hotel and restaurant operator Whitbread, and Rolls Royce all suffering double-digit share price falls.

This week Amazon announced that its founder Jeff Bezos will step down as CEO  later this year, as it unveiled its first-ever $100 billion-plus revenue quarter. Since its 1997 IPO, Amazon has delivered roughly a 200,000% share price return to its investors under Bezos’ leadership, including a 65% return over the past 12 months. 

Markets and stocks 

US stock markets slid back sharply last week, as the SPX500 fell 3.3%. Tech giants Apple and Microsoft among the losers, the NASDAQ lost 2% on Monday and flatlined for most of this week. Apple shares fell on Monday by 3.7% totalling a 5.1% fall in a week, despite as we commented in this update  last week the firm reporting record-setting 4th quarter earnings.  

Yesterday the SPX500, NASDAQ100 and DJ30 all closed nearly flat. There were  few highlights with Energy stocks up 4.3%, led by 7% + gains from Diamondback Energy, Schlumberger, Devon Energy and more. Google parent Alphabet had a good week rising 7.3% after reporting expectation-beating quarterly earnings.

London-listed shares posted a mixed day on Wednesday, with the UK100 down slightly. At the top of the index, Vodafone was the standout performer, adding 5.9% after CEO Nick Read predicted the company’s growth will accelerate, and the firm reported an improvement in its German business. Vodafone’s share price has now  gained 26.8%  in the past three months. 

The Bank of England Monetary policy met on Wednesday and agreed unanimously to maintain rates at 0.1% The Committee also agreed to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £20 billion, and to continue  continue with its existing programme of UK government bond purchases at a target £875 billion bringing the total asset purchases to £895 billion.

Perhaps encouraged by a strong underpinning of the economy by the Bank of England Financial stocks, Lloyds Banking Group and NatWest Group both gained more than 5% this week The jump came despite  the Bank of England cutting its 2021 economic growth forecast for the UK, but predicted a rapid recovery in the second half of the year thanks to the Covid vaccine rollout.

Similarly in the US the Financial sector did well Morgan Stanley was among the biggest rises, up 4.9%  gaining 38.6% over the past 3 month. Similarly, Goldman Sachs rose 4.5%, and JPMorgan gained 3.1%. The banks appeared to be buoyed by news of continuing stimulus negotiations in Washington D.C., with a new package widely expected to pass with or without support from Republicans

For the first time since January of last year, oil prices climbed above $56. The most recent gains are attributed to OPEC’s decision to maintain the current output cuts.

The Australian sharemarket recorded its best week in three months as upbeat earnings results and a surprise extension to the Reserve Bank of Australia’s bond-buying program pushed local shares to an 11-month high.The S&P/ASX 200 Index climbed 233.1 points, or 3.5 per cent, to 6840.5 

In Asia the HKG50 was up more than 2% at time of writing, while the China50 and JPN225 indices were both seen more than 1.4% higher.

Vaxart jumps on Covid-19 vaccine news: Oral vaccine developer Vaxart announced on Friday that it will be releasing its Covid-19 vaccine trial results this week. In anticipation of the results, the VXRT stock jumped 34.3% on Friday. 

A  little more optimism appears to have occurred today as Covid rates begin to decline and more positive vaccine news is released. Today the UK100 opened 10 points higher, the GER30 was up 77 points and the FRA40 opened 28 points higher.

And finally when all else fails on earth, Virgin looks at new frontiers in space

Space travel company Virgin Galactic yesterday announced that it will resume test flights of its SpaceShipTwo Unity spaceplane this month. As a result, the SPACE stock soared more than 21%!