Welcome to our weekly client update. In Jersey, Ministers are facing an anxious wait for this weekend’s Covid figures to find out if the closure of bars, restaurants , hotels and gyms two weeks ago has had an impact before deciding if stricter measures are needed before Christmas.
Yesterday Health Minister Deputy Richard Renouf revealed that the latest estimated R number is between 0.9 to 1.1 which means that if it is below 1 the virus is no longer spreading at an exponential rate. The theory being that if it is above 1 then a person with Covid is passing it on to at least one other person.
Facing a barrage of questions in the States Assembly yesterday, Chief Minister John Le Fondre announced that the Government would be cancelling a planned press conference last night which was due to provide the latest case numbers and vaccination plans because the Government needed more time to assess whether it’s lockdown measures were working. On Wednesday the Government reported its largest ever rise in Covid cases – 100 in a single day. Currently there are 876 active cases with 533 symptomatic and 343 Asymptomatic, 31 are in hospital with 5 in intensive care requiring ventilation assistance. There are also approximately 4,600 people in isolation as a result of being a direct contact.
The Chief Minister said, “The Crucial thing is to understand what the trend is and whether the results we have today are part of that trend or whether they were in place prior to the impact of the hospitality circuit breaker and other measures announced 2 weeks ago which should all be starting to bite from the end of this week.” He also added that “testing in Jersey rose by 40% last week with around 14,000 tests carried out and insisted that the figures do not mean we have more of this virus than other places but just that we are finding it more than any other jurisdiction”.
Meanwhile in their Christmas messages after the last States sitting of the year, the Bailiff and three long serving States Members urged islanders to ‘Stay Safe’ over the Christmas period while paying tribute to the efforts all islanders have made during the Covid-19 outbreak. The Bailiff, Timothy Le Cocq, said that the imminent roll-out of vaccines offered some hope going into the festive period.
As usual we have looked at all the main stories below, with the customary reminder that the stock market figures quoted were correct at close of business in the relevant market on Wednesday evening, and the commentary was written on Thursday morning so that the update could be with you on Friday.
This will be our last update before Christmas as we’re guessing you may have better things to do next Friday. With the vaccine being rolled out and life hopefully returning to something close to normal, we are not planning to bring the update back in the New Year. But, if 2020 has taught us anything, it’s that there is no more sensible phrase than ‘never say never…’
The Latest News
…And so we cannot bring you definitive news on Brexit. It appears that the negotiations may well go on until the end of the year, with some commentators now talking of a brief period of ‘no deal’ before a deal is finally reached. It is now 1,638 days since the UK voted to leave the EU: by any standards, quite a long time to have something on your ‘to-do’ list…
In other news, not particularly positive this week, was London going into Tier 3 as Covid cases in the capital increased rapidly, and the Government followed Europe’s lead in announcing a big crackdown on tech firms such as Google and Facebook. Digital Secretary Oliver Dowden said, “I am unashamedly pro-tech, but that doesn’t mean a tech free-for-all,” as the Government looked to improve online safety. Lower prices for food, clothing and non-alcoholic drinks saw UK inflation fall to 0.3% in November, from the 0.7% recorded in October.
Away from the UK, Chairman of the US Federal Reserve Jerome Powell said that the next few months would be ‘particularly challenging’ but he was optimistic of a ‘strong rebound’ in the second half of 2021. The Fed forecast US growth of ‘roughly’ 4.2% next year, with unemployment falling from 6.7% to 5%.
Germany entered a tougher lockdown following a sharp rise in Covid cases. Schools and non-essential businesses will close, with the measures staying in place until January 10th. The trade spat between China and Australia continued, with Australia complaining to the World Trade Organisation over China’s imposition of tariffs on its barley exports. China accounts for close to 40% of Australia’s exports: that might be the definition of over-reliance on one customer.
The Stock Markets
This has been a relatively quiet week on world stock markets, with many markets unchanged in percentage terms. The French market, for example, closed Wednesday at 5,548 for a gain of just un point. Across the border the Germany’s DAX index was one of the week’s better performers, rising by 2% in the week to close Wednesday at 13,566.
At home, the FTSE-100 index of leading shares managed a gain of just seven points to close at 6,571 while the prospects of a deal with the EU pushed the pound up slightly against the dollar, ending the week up 1% at $1.3474.
In the US, the Dow Jones index stayed above the 30,000 barrier, although it too was unchanged in percentage terms, ending Wednesday at 30,155. The more broadly-based S&P 500 was up 1% to 3,701.
It was a very quiet week on the Far Eastern markets where China’s Shanghai Composite index at 3,367; the Hang Seng in Hong Kong at 26,460 and Japan’s Nikkei Dow at 26,757 all managed to be more or less unchanged. The South Korean market did make some progress, rising 1% to 2,772.
Looking back over the six weeks of this second series of updates, all the markets we cover have made appreciable gains as hopes for a vaccine have strengthened.
We used October 31st as the ‘starting point’ for markets in our November 13th update. China’s market is up by just 4% since then, but both the French and South Korean markets have made gains of more than 20%. In the UK the FTSE ended October at 5,577 and had risen 18% by Wednesday evening.
As we mentioned in the introduction, this will probably be our last weekly client update. It has been a pleasure to write it for you, and we hope it has kept you informed and entertained through the two periods of lockdown.
We have always tried to be optimistic in the updates. That has not always been an easy task in 2020, but we are absolutely convinced that the future is bright. The Chairman of the Federal Reserve is optimistic about prospects for the US and, while the focus of attention has been on the talks with the EU, the UK has quietly been doing free trade deals with several countries. This week saw a deal with Mexico and, as we write on Thursday morning, City AM is reporting that the UK has signed a customs agreement with the US, ensuring trade between the countries is not disrupted after the Brexit transition ends this month.
We’d like to thank all our clients for reading these updates, and for the many comments we’ve received.
We’d also like to thank the many characters around the world who brought some light relief into lockdown: the man who ran a marathon round his dining room table, Tesla boss Elon Musk, who earlier this year christened his baby son X Æ A-Xii – and the young Australian girl who made a ball gown out of mango skins. Let’s hope she’s wearing it on Christmas Day…
Whatever you’re wearing, have a lovely Christmas – and may the New Year bring everything that you and your family would wish for.