Market Report 20th July 2020
A weekly roundup of the things which have caught my eye during the past week.
A publican in England posted 2 job vacancies on his twitter feed. Normally this would attract around a dozen applications. This time though he received 484. A sign of the growing unemployment in the UK. It has been estimated that 650,000 jobs have disappeared as a result of the lockdown.
Bellway House Builders ask subcontractors to reduce their prices by 5%. While they are keen to stress their forward order book has 6000 builds this is down compared to pre lockdown.
British airways announces, it has retired its fleet of 747 aeroplanes 3 years ahead of targets. With the skyways opening up again they have decided it is not worth the costs to bring the 747s back into service. They will now focus their longhaul flight program on Dreamliner planes.
Ryanair have removed fees on bookings, for a short period, in an effort to attract travellers to fly with them.
Marks & Spencers announce they are closing down more stores another blow to the high street which is struggling to attract back businesses.
Community Access to Cash pilot is launched to provide banking systems to towns and villages around the UK who have lost all the banking services and atm machines. There are 8 pilots being launched which should be operational from September for the 6 months trial period.
EU stock markets closed near a one-month high as EU leaders gather to discuss a rescue package. Initially, it was flouted there would be a 500 billion euros fund to support countries. This has been knocked back and currently discussions are around a smaller amount nearer 390 billion euros.
All markets have been positive about a possible vaccine with the UK placing an order for 90 million injections with Pfizer.
US markets declined on the fear of a second wave virus and states being put back into lockdown.
Gold – the price is fairly static with a slight increase of 0.16% over the week. Russia has now become the largest exporter of Gold. China is trying to buy gold mines and production facilities globally with Australia and Canada trying to protect businesses from hostile Chinese takeover bids.
Silver – the increase also slowed on silver with the weekly increase of 1.31%. Recent reports show silver demand is continuing to increase while the supply of silver is restricted due to a variety of factors. Silver is a by-product of mining other metals and mining has slowed due to lockdowns around the globe. With businesses getting back into manufacturing and silver being a consumable the demand has increased. The gold:silver ratio is attracting more investors into silver.
Gold:Silver ratio – continues to decline and is down to 94.47. While it is still dropping, silver still remains an undervalued asset.
Oil - OPEC and Russia are trying to reach agreement on the quantity of oil output. They are hoping to reach an agreement that will go through to 2021 or even 2022. Renewed fighting between Azerbaijan and Armenia together with greater conflict between Russia and Turkey is threatening the vital Baku-Turkey pipeline for oil and gas transfer to many countries.
Nuclear Fusion – tests were successful this week in the quest for unlimited energy from nuclear fusion. Over the past few years, the size of operations/testing has been upscaled. There is still a long way to go to prove stability in a full scale working model but there is optimism with the successes of the latest upscale.