Weekly Market Insight

Latest Economic & Market Update 11th November 2020

11th November 2020

Good afternoon, it is November 11th 2020 and here is your economic and market update from BlackBee. 

Today’s focus:

  • Approvals for affordable home scheme mortgage loan falls in the first half of 2020.
  • Tech shares continue to fall.

Loan approvals for the governments affordable home scheme fell by 60% in the first half of 2020. Drawdowns for the scheme also fell in the first half of the year, declining by 50%. This follows the increase of interest rates for the scheme in January and the effects of Covid-19. Interest rates on loans increased from 2% to 2.745% making them considerably more expensive over the lifetime of the mortgage. The scheme was originally introduced in 2018 to help low-income borrowers get on the housing ladder with low-cost mortgages. Figures from the Department of Housing show that 235 home loans were approved with a total value of €38.2 million. There were 283 drawdowns with a value of €47.7 million. In comparison, in the first half of 2019, there were 574 loans approved during the same period with a total value of €95.7 million and 556 loans were drawn down with a total value of €93.9 million. (Source: Irish Times). Affordable housing has been a long-standing issue in Ireland as the housing crisis continues. BlackBee aims to provide some relief by offering investment opportunities with the strategy of delivering social housing units.  

Tech companies continued to fall on Tuesday leading the Nasdaq -1.37% lower. The fall in tech shares outweighed gains in industrials (+1.79%) and energy (+2.52%) companies, dragging the S&P500 index -0.14% lower. Seven out of the ten sector groups in the S&P500 Index were in positive territory on Tuesday despite the S&P500 Index falling. Following the rally in stocks in recent days, there is concern that the rally may have been overshot as a large amount of uncertainty still remains over many issues, including the transition of President-Elect Joe Biden into office and the passing of a new fiscal stimulus bill. The increasing number of coronavirus cases is also a concern as the US set a new daily record on Monday with 142,097 cases. Treasuries continued to fall with the US 10 year Treasury yield hitting 0.9595% up from 0.9235%. The climb in oil prices continued as the WTI and Crude Oil climbed 2.66% and 2.85% respectively.

Best & Worst Performers of Large Cap US Stocks on Tuesday
Click image to enlarge

Global Market Update
(as at close of markets 10/11/2020)