Weekly Market Insight

Latest Economic & Market Update 12th May 2020

12th May 2020

Good afternoon, it is 12th May 2020 and here is your economic and market update from BlackBee.

Today we are going to focus on: > FED support mutes Bond Market
> Reopening of the UK economy could be set up for fall.

The US 10 year Treasury yields sits at 0.7%, down from a March high of 1.19%. The bond markets give insight into future expectations of an economy and show the risk-free rate of return an investor can expect. However, indicators on the economy given in the bond market are now muted and being called into question as the FED have pumped money into the market over the past few weeks. With the support of the FED, the market will not move too far in any one direction.

Yesterday the UK Prime Minister Boris Johnson announced a 51-page lockdown exit strategy. In the last few weeks, medical experts have warned that vaccines will not be ready for at least a year and potentially up to 18 months. Johnson began his speech by reiterating that the UK could be battling the coronavirus for a prolonged period until there is an available vaccine. For those who cannot work from home, Wednesday will mark the beginning of a return to work. Ministers have been pushing for a return to work for those in construction and manufacturing. The move has been heavily criticised as it puts these workers at risk.

After the announcement on Monday from Boris Johnson, there was also footage released of commuters packing London Underground trains. Phasing the lockdown exit strategy is vital for countries to prevent another outbreak and lockdown. Letting workers back to workplaces that do not have safety measures in place yet, combined with the risk in commuting to work on packed trains, increases the likelihood of another forced lockdown, an outcome that an already fragile economy cannot afford.

Best & Worst Performers of Large Cap Stocks on Monday

Global Market Update
(as at close of markets 11/05/2020)