Market commentary

27th February 2020

Coronavirus continues to dominate headlines with the effects being seen across global markets, as the scale and impact of the epidemic begins to become a reality. Further contamination in Northern Italy, and now the US, has caused a drop in investor optimism, which in turn has affected global equity markets. UK stocks have returned to levels last seen at the start of 2019. This has caused many investors to seek refuge elsewhere, predominantly in traditional safe havens including gold and government bonds. The knock-on effect into global supply chains is starting to be felt from the first wave of the outbreak, therefore, we can expect to feel this hangover for at least a few more months. Our latest bulletin, which you should receive shortly, reminds us to maintain perspective in these times rather than succumb to the onslaught of headlines. Of course, we too are taking this seriously and are reducing our exposure to global equities and we will closely monitor developments as the situation continues to unfold. However, our long-term view remains very much the same as it has previously, with the expectation of some normality to be seen as progress is made to supress the threat of the virus spreading further. 

It may have been easy to forget that the UK and EU are about to start nine-months of negotiations, which are not dissimilar to the ones we have witnessed over the past few years. We will likely continue to see the EU rebuffing the various uncoordinated calls coming out of Whitehall, and it will be hard to decipher what is a true representation of Boris’s Government over the coming months. Alongside this the media has been focused on events such as the unexpected resignation of Sajid Javid shortly before the Budget due on the 11th of March.