On Friday Rishi Sunak, the Chancellor announced a huge range of financial packages to help businesses large and small and employees in what is now termed a war footing against this hideous disease.
He has promised to protect employees wages for 80%, up to a maximum of £2500 per month to stop companies laying off staff. Hes also slashed interest rates down to 0.1%, which helped prop up the gilt market. Pubs, bars and restaurants have closed, although that didn’t stop many last minute revellers filling them on Friday night!.
Ive noticed a big change since last week with the queue outside the chemists opposite the office and B&Q observing the 2m social distancing. Maybe the threat of a total lockdown, which will surely come, has made people take this seriously.
The action by the UK Government saw the Gilt market bounce back by nearly 5% after large falls last week, so that was a good sign that intervention can calm markets. Sadly over the weekend UK politicians are trying to make a mess of this situation. Trump announced a $4 trillion rescue package only for the Democrats to vote it down. They are having another vote today and one would hope that sense would prevail. The results of the new vote will happen after the US market opens so we will have to wait and see what the outcome is.
What to Do?
The sell off has been so severe and so quick I am still of the belief that people should stay invested. Everything I am reading says when the recovery happens it will be very quick, so to time the market is a fools errand. If you think about it, if we cant spend money (other than food) during the crisis, when its all over there will be pent up demand to spend money quickly. Holidays will be booked, goods bought and slowly, life should return to normal. (Lets hope that the goodwill being espoused for NHS workers, shop workers, delivery drivers et al will continue.) However, we still don’t know how long it will last so our advice is stay invested.
We continue to adapt to the changing environment. From tomorrow most staff will be working from home and we will have the bare minimum in the office to open post and scan it all on our back office system. This will allow homeworkers to access the paperwork remotely. The office number is already hooked up to the staffs mobile phones, so that side of the business should see little change.
Anyway, stay safe and healthy.
Phil J McGovern FPFS