Markets Weekly

07 May 2020

4 minute read

Week ahead

The UK and the eurozone gross domestic product (GDP) data for the first quarter (Q1) will indicate how much the rising concerns in financial markets about the potential economic impact of the coronavirus pandemic are justified. With COVID-19 cases beginning to spread in March in both regions, growth in Q1 is likely to be weak.

In Germany and France, the April final year on year (y/y) inflation data on Thursday and Friday, respectively, is likely to confirm subdued price growth. Disruption to both economies from containment measures is hitting demand more than from interruptions caused in the supply chain, with the latest readings lower at 0.8% and 0.5% respectively.

Both China and the US publish April retail sales and industrial output figures on Friday. In the former, while sales growth has remained weak, at -15.8% y/y, industrial output seems to have rebounded from previous weakness to -1.1% y/y in March, but is still contracting.

In the US, March data for both retail sales and industrial production weakened to -8.4% and -5.4% m/m respectively – raising concerns about how much the pandemic is hurting the economy. Investors will also focus on the jobless claims data on Thursday, with new record highs regularly being set in recent weeks.

Chart of the week

Will COVID-19 change how investors invest sustainably?

The COVID-19 pandemic will significantly shift many aspects of our lives, including how we invest. Even before the outbreak, we had observed the emergence of a “new normal” for investing. Increasingly, investors were considering how investing sustainably could benefit their portfolio returns and the wider world.

Over the last few years, Barclays has supported research into the leading investors driving this movement. Investing for Global Impact is a global study, covering 410 investors with $125bn of assets under management, of how individuals and families, family offices, foundations and charities invest and donate their capital for impact.

Many valuable insights and trends have surfaced over the seven years since its launch. Respondents’ proportion of portfolios invested with impact considerations has almost doubled, to almost a third of their portfolio’s, by value, last year.

As the chart shows, investors are making sustainable and impact investing core to their investable portfolio. Last year new respondents caused a peak in the stage of having “made [their] first impact investment and are considering further impact opportunities.”

Chart of the week

Whether this trend continues or accelerate as the pandemic causes untold damage is unknown. For many though, the crisis is profoundly changing our lives and the world, including the role of family and wealth, environment stewardship, social cohesion, globalisation and capitalism.

With 2020 research survey now open, we want to hear from more investors about how these trends are affecting your current and future portfolios. To participate and share your opinions, view the Investing for Global Impact survey. For more information about the research or to receive a full copy of the prior reports, please reach out to your Barclays contact.


Unemployment shapes the recovery

As equities take a more optimistic view than bonds on the likely economic impact of the pandemic, which financial market will be closer to the truth?

Previous editions of Markets Weekly

Investments can fall as well as rise in value. Your capital or the income generated from your investment may be at risk.

This document has been issued by the Investments division at Barclays Private Banking division and is not a product of the Barclays Research department. Any views expressed may differ from those of Barclays Research. All opinions and estimates included in this document constitute our judgment as of the date of the document and may be subject to change without notice. No representation is made as to the accuracy of the assumptions made within, or completeness of, any modeling, scenario analysis or back-testing.

Barclays is not responsible for information stated to be obtained or derived from third party sources or statistical services, and we do not guarantee the information’s accuracy which may be incomplete or condensed.

This document has been prepared for information purposes only and does not constitute a prospectus, an offer, invitation or solicitation to buy or sell securities and is not intended to provide the sole basis for any evaluation of the securities or any other instrument, which may be discussed in it.

Any offer or entry into any transaction requires Barclays’ subsequent formal agreement which will be subject to internal approvals and execution of binding transaction documents. Any past or simulated past performance including back-testing, modeling or scenario analysis contained herein does not predict and is no indication as to future performance. The value of any investment may also fluctuate as a result of market changes.

Neither Barclays, its affiliates nor any of its directors, officers, employees, representatives or agents, accepts any liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this communication or its contents or reliance on the information contained herein, except to the extent this would be prohibited by law or regulation..

This document and the information contained herein may only be distributed and published in jurisdictions in which such distribution and publication is permitted.  You may not distribute this document, in whole or part, without our prior, express written permission. Law or regulation in certain countries may restrict the manner of distribution of this document and persons who come into possession of this document are required to inform themselves of and observe such restrictions.

The contents herein do not constitute investment, legal, tax, accounting or other advice. You should consider your own financial situation, objectives and needs, and conduct your own independent investigation and assessment of the contents of this document, including obtaining investment, legal, tax, accounting and such other advice as you consider necessary or appropriate, before making any investment or other decision.