Market Outlook Report – March 2020

Market Overview

March 2020

Most major sporting events postponed due to Coronavirus

As governments worldwide crackdown on large gatherings of people alongside music events, almost all major sporting events have inevitably been cancelled/postponed, to protect against the spread of the virus. The most significant so far understandably being Japan Olympics 2020 and Euro 2020, which have now both been postponed by 12 months.

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Russia/Saudi Oil Trade war

Although the Coronavirus has understandably dominated the headlines for some time now, the ongoing tensions between Russia and Saudi Arabia are also of global significance, contributing towards the historic falls we are currently seeing. This dispute came to the forefront after Russia refused Saudi pleas to cut oil production in order to stem the fall in oil prices caused by the Coronavirus.

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Most global airlines will be bankrupt in ten weeks

Due to the increasing numbers of people either un-able or un-willing to travel abroad, and the uncertainty, airline companies have taken a concerningly large hit. In a study conducted by the Centre for Aviation, an Australian consultancy firm, projected that due to the COVID-19 crisis, “by the end of May 2020, most airlines in the world will be bankrupt.”

Relevance/ Impact 

American Growth to shrink 5% by Goldman Sachs

As one of the most important global economies, the United States’ management of the COVID-19 outbreak is of high importance. The first quarter has seen both the S&P500 and the Dow Jones Index experience serious losses (S&P500 down 20.4% and the Dow Jones Index down 22.6% on black Monday) in a representation of how many US companies rely heavily on an international supply chain.

Relevance/Impact

FTSE is heading for a nine-day losing streak

Since the Coronavirus sell-off first began, the FTSE 100 has fallen over 30% and the S&P 500 has fallen over 27% despite several leading central banks offering efforts to try and soften the economic blow from the virus. With the virus showing no signs of slowing across Europe, it appears the bull market that we have enjoyed over the last decade has come to an end. In addition to the FTSE 100 suffering significant losses, the UK’s mid cap index, the FTSE 250 has losses extending to nine days in a row which amounts to the worst run in over ten years. 

Relevance/ Impact 

NHS prepared for its biggest crisis yet

In light of the increase in Coronavirus cases in the UK, millions of operations are being postponed and patients are urgently being discharged from hospital and private operators have been called in to assist. The cancellation of ‘non-life-saving’ procedure is to ensure that more hospital beds and operating theatres become available for those patients who need urgent care and treatment for Covid-19. Currently there are only 5,000 respirators available in the UK’s hospitals to treat those patients whose respiratory system will suffer as a result of Coronavirus.

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Disclaimer: This document represents the opinion of Reeves Independent only and is not intended as advice and no investment decisions should be made solely on the back of this email. Always seek independent financial advice before taking any action. Past performance is not a guide to future performance. All investments carry the risk that you will get back less than you put in.