The World In A Week – Interim Update

They just keep on coming.  The latest in stimulus packages, at a modest €130 billion, comes courtesy of Germany.  This is for Germany rather than the Eurozone and was much larger than expected, with the emphasis firmly on increasing demand.  It will include a cut to their VAT, several infrastructure projects and €300 for every child.  This should make the meeting of the European Central Bank today a happier place and will help underscore the need for both fiscal and monetary support to continue unabated during this time.

While the headlines about COVID-19 start to diminish, the void is quickly replaced with political upheaval.  The reigniting of the US vs China battleground has taken to the skies, with the proposed suspension of passenger flights arriving from China.  China currently operates flights to the US but only with four domestic airlines.  The friction comes from their continued ban of allowing US airlines to operate the route and the latest move adds pressure to release that ban, keeping the political leverage of tensions between the two countries firmly in place.

Another airline that is feeling the pressure of the lockdown is EasyJet, having been demoted to the FTSE 250 during the quarterly shake-up of the UK equity indices.  Yesterday’s reshuffle saw airlines and travel companies among the sectors being relegated from the FTSE 100.  Promotions to the FTSE 100 were companies with a digital focus, such as gaming company GVC Holdings, cyber-security firm Avast and home improvements business HomeServe.  The FTSE 250 also had a similar focus for its promotions, with gaming firm 888 Holdings and online electrical retailer AO.com.

Is this an indication of what we have all been up to during the lockdown?  Stockpiling frozen goods, DIY and playing online bingo.