As I am sure you’re already aware, due to the continuing fear surrounding the coronavirus we’ve seen some significant swings in the global financial markets recently. We understand it’s hard to keep up in an ever-changing situation, so we’ve created our weekly market update email, sharing the latest news, including the good, the bad and the slightly light-hearted.
Here at Calculis, we’re tracking the latest on the coronavirus outbreak and the global response. It seems that the severity of the outbreak on the global economy means there’s a distinct possibility of a recession. The good news? A recession caused by the coronavirus would look very different from the one launched by the 2008 financial crisis. This time around, we are likely to see a ‘stay at home’ recession – a sharp fall in consumption as a direct response to the various curfews, quarantines and social distancing put in place. However, as fast as economic growth is expected to fall, we may see a similar rapid rise as pent-up demand on discretionary goods and services is released.
We’ve been here before
Nothing lasts forever – not even a stock market that keeps going up and up!
We’ve just said goodbye to the longest-running bull market (a market in which share prices are rising, encouraging buying) in history and entered a bear market (a period in which the major stock indexes drop by 20% or more from a recent high point and remain that low for at least a few months). It’s important to note that we’ve seen 13 corrections (a period in which stock prices drop following a period of higher prices) and 8 bear markets in global equities in the last 40 years. That’s about one every other year!
The average time period for a bear market is 1.3 years vs 7.9 year bull markets. Investors who have stuck out bear markets have been rewarded for their perseverance with bull market returns that can more than make up for the preceding losses, so hang in there!
Coronavirus update from Calculis
We’d like to reassure you that we’re closely monitoring the development of the crisis and are following the advice given by the Government, NHS and World Health Organisation.
Our ultimate aim is to continue to support our clients, without jeopardising the safety of our staff. We’re taking these matters extremely seriously and are adapting our operations to follow current best practices.
We’re currently operating the business on a skeleton office, with key staff on rotation and members of the team working from home where possible. As a result, our ability to answer phone calls may be impacted. Clients can email email@example.com or individual advisers/team members.
All client meetings will now be held via skype or teleconference.
Normal periodic valuations will be delayed while we focus on communicating with clients during this volatile period.
It’s not all doom and gloom…
We’re not making light of the very serious nature of our situation, but we all need a smile in between hand-washings and news-checking. Here are some of the positive stories to come out of the crisis:
The companies benefiting from the coronavirus
It’s not just hand sanitiser or toilet roll that’s seeing an increase in demand due to coronavirus. These are the other sectors benefiting from our self-isolation too!
- Deliveroo and other food takeaway agencies are thriving as restaurants have closed
- Netflix, other digital subscription services and gaming sites are of course benefiting
- Amazon is also reportedly taking on more staff as orders have spiked
- Whatsapp, Skype and other digital connection services have all registered an increase in use with people calling their loved ones instead of visiting
- Online dating sites are experiencing a surge in activity as more people are staying at home due to social distancing with the likes of Tinder using safety pop ups for those who may be tempted to meet
- Divorce lawyers in China have seen a slight increase in demand after couples have been having to spend more time together in self-containment
- In America the trend is slightly different, with gun and body armour sales increasing
Chelsea Football Club is making their Millennium Hotel at Stamford Bridge available to NHS staff
To support those working long shifts who may not be able to travel home, the club’s owner, Roman Abramovich, is covering the costs of providing the accommodation.
Couple recreate cancelled cruise
A couple in Australia recreated their holiday in the comfort of their living room after their cruise was cancelled. Wearing robes, sipping drinks, and with a personal supply of toilet roll, Norma and Dave Trill’s daughter Jane filmed them relaxing in front of an ocean video playing on their TV.
National Trust to open parks for free to give people ‘access to space’
The National Trust has announced it will open its gardens and parklands for free during the coronavirus outbreak. The trust say they will be shutting indoor sites, such as houses, cafes and shops, but still want to encourage the public to enjoy open spaces.