Market Outlook Report – May 2020

Market Overview

​May  2020

European countries begin to lift lockdown

​Countries across Europe have begun to cautiously lift restrictions of the lockdown, in an attempt, to stimulate their suffering economies. The principle adjustments have been seen in phases as business begin to reopen and schools are allowing certain age ranges to attend. Extra hygiene measures are in place along with social distancing rules to maintain limited contact and spread of the virus.

Relevance/ Impact 

Permanent scarring of UK economy warning from Chancellor

Chancellor of the Exchequer, Rishi Sunak has warned that the UK is likely to face a severe recession as a result of the Coronavirus, the likes of which have never been seen before.  The Bank of England and Treasury have stated that a recovery is not likely to be as quick as originally predicted and the hopes of a ‘V-shaped’ recovery were misplaced.

UK unemployment claims and the number of people claiming redundancy has increased at the highest rate on record. In the first few weeks of the UK lockdown, the average wage fell, and new hiring came to a complete halt.

Relevance/ Impact 

Beaten-Up Oil Prices Soared

Weeks after hitting historic lows, Oil prices surged more than 10%. The U.S. crude stockpiles did not increase as predicted, China’s oil demand has climbed back to 90% of pre-pandemic levels and there is new optimism in the markets that fuel consumption across European countries will rise as they begin to ease coronavirus lockdowns. This combination has allowed the price of oil to steadily rise for three weeks.

Relevance/ Impact 

China raises US Trade Tensions

After dominating the news for most of 2019, the US – China trade war rears its ugly head and could pose a significant threat to a market recovery from the Coronavirus. The US has ridiculed the Chinese government’s handling of the virus on multiple occasions, blaming them for the spread of the virus into the US. China, on the other hand, has said the US should stop wasting time and work with China to combat Coronavirus, instead of smearing the country.


Coronavirus: US Update

The US currently accounts for more than 30% of global coronavirus infections, despite being less than 5 percent the world’s population. This suggests that the US has in fact been ineffective in dealing with the virus, with the highest amount of cases, even if they are one of the largest nations in the world.

However, Trump has stated the high number of US Coronavirus cases should be a badge of honour as it represents ‘’much better testing’’.

Relevance/ Impact 

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.