A recent rally in equity markets has seen the S&P 500 only down by -2.6% in 2020 in Sterling terms. However, the FTSE All-Share remains the poorest performing equity asset class; down -23.0% for the year. The S&P 500’s recent upsurge partially attributes to the depreciation of Sterling which continued to drop last week amid stalling Brexit negotiations between the UK and the EU.
Rishi Sunak has extended the Government furlough scheme to the end of October as he aims to curb the number of job losses caused from the virus. Already 7.5 million workers are on the furlough scheme, which equates to 23% of the total working population. The Government initiative is estimated to cost £14 billion per month and could reach £80 billion.
The reopening of schools appears to be the biggest debate as Michael Gove discussed his intentions to reopen schools providing conditions were met that include smaller classes and staggered arrivals. Denmark was one of the first countries to reopen schools back in April, prioritising its younger children to return to class, whereas Germany has given precedence to their older students. Much of Europe have reopened their schools and have taken precautionary measures to ensure a safe environment including regular breaks to use hand-washing facilities. Globally, almost 1.6 billion students have been affected by the pandemic and further guidelines are expected to be revealed later this week.
The renewable energy sector has flourished in recent months from lower electricity demand and brighter weather conditions with solar farms powering almost 30% of the grid. The UK has now reached 34 days without operating with coal as of the 14th May. Global energy demand has declined 3.8% in Q1 of 2020 with coal demand falling by 8% and oil demand by 5%. Besides a greener environment, the pandemic has highlighted the importance of international co-ordination and co-operation, as we have seen social distancing operated on a global scale. If a similar stance is taken going forwards, the hope is that the fight against coronavirus will transpire into a successful global response to climate change.