With coronavirus infections and on verge of going out of control, the Prime Minister has put England into lockdown with effect from midnight Wednesday evening as we cross over to Thursday.
The government has confirmed the extension of the Furlough Scheme to give many employees and employers at least some level of stability.
The Financial Conduct Authority (FCA) has also confirmed intentions for mortgage lenders to offer a further 6 months mortgage holidays as well as loans and credit for credit cards, loans, car loans, HP, other credit agreements and pawn broker loans to also have payment holidays.
On the strength of this, the pound will weaken. This may mean that FTSE 100 will rise (as most of companies listed earn their profits overseas in $ or €), in addition some investors may buy into markets now whilst they are low but they could go either way.
We suggested a few weeks ago that a defensive strategy could be to hold non UK, global stocks as a weak £ will mean that if you have invested in say Euro or North American funds, when the £ weakens your full fund value will increase as you US or EU funds will rise in value even if the stock market has not moved at all.
Some may go defensive and move to de-risk by ‘cash parking’ funds for now.
We know that the US election is here and results may turn markets positive or negative depending upon who wins. We know that Brexit is very close now and a deal will likely be done, despite the squabbling. We do not know, but we can surmise that the vaccine will still come and whilst it is going to be a long road to recovery, markets will pick up.
Keep calm, carry on and stay safe.