Weekly Market Insight

Latest Economic & Market Update 17th August 2020

17th August 2020

Good afternoon, it is August 17th 2020 and here is your economic and market update from BlackBee. 

Today’s focus:

  • Aperee enters contract to manage 7 Nursing Homes from Ditchley Group.
  • European stocks fall on the news of quarantine measures. 
  • UK imposes quarantine measures on travelers from France and the Netherlands.
  • Q2 GDP decline in EU is largest on record

Aperee is to take over the management of 7 nursing homes from the Ditchley Group. Aperee is the operational arm of the BlackBee Healthcare Fund. The homes, situated in Cork, Kerry, Kilkenny and Galway will bring the numbers of Homes under Aperee’s management to 9, including 499 beds. BlackBee sees this as an investment that will set new care standards and offer transformative social impact, whilst helping drive the economy.

Of the acquisition, Paul Kingston, Aperee CEO says “Our aim will always be to ensure the best possible care is provided to our residents and we look forward to working with all the hard-working staff in the homes in continuing to deliver these objectives. We welcome on board the members of the Ditchley team and thank them for their hard work to date, I want to also thank Noel Creedon for his commitment and dedication in growing the Ditchley group over the years”. Ditchley Group Chair Noel Creedon says “The nature of elderly care is rapidly changing, and this announcement by Aperee and the BlackBee Healthcare Fund means that the seven homes previously operated by the Ditchley Group have a bright future. We have been consistent in delivering quality care to our residents, and this investment means that quality care will continue into the future.” 

The Stoxx Europe 600 fell -1.2% and the FTSE100 declined -1.55% on Friday as investors reacted to news that the UK is adding France and the Netherlands to the quarantine list. Travel restrictions in Europe were also felt in the US as trading was mixed with investors lacking clarity on direction. The Dow Jones climbed 0.12% but the S&P500 and Nasdaq fell -0.02% and -0.21%, respectively. The stalemate in congress regarding the new stimulus package also added to investor caution. Yields on the 10 US Treasury fell to 0.71%.

On Friday, shares in travel industry companies were among the worst performers after the UK added France and the Netherlands to the UK’s quarantine list. In retaliation, France has stated that they will be ordering a voluntary quarantine for UK travellers arriving in France. The transport secretary, Grant Shapps, has also stated that if a country is above the threshold of 20 cases per 100,000 over a seven-day rolling average, it will be added to the quarantine list. The addition of France and the Netherlands to the list will severely affect travel between the countries in what is another blow to the tourism sector.

Data released by Eurostat on Friday showed that in the EU, employment fell by -2.6% and GDP fell by -11.7% in the second quarter of 2020. These declines are the largest on record for the EU. In Q1, employment in the EU had fallen -0.1% and GDP had declined by -3.2%. The -2.6% decline in employment in the EU during Q2 2020 represents 5.5 million job losses and does not include those who are on furlough schemes. Recovery from the pandemic-induced recession is likely to be gradual, although we have seen signs that the economy is picking back up. Eurostat also released a report on Friday showing that from May to June, exports in the Eurozone increased by 11.2% and are now 10% below levels seen in June 2019.

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

Global Market Update
(as at close of markets 14/08/2020)