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Last Week in the City: Optimism over UK recovery rises

Garry White, Chief Investment Commentator, provides a round-up of the market movements and the global investing outlook for the week ending 23 April 2021.

Garry White, Chief Investment Commentator, provides a round-up of the market movements and the global investing outlook for the week ending 23 April 2021.
Garry white employee

Garry White

in Features


Markets wobbled this week on concerns over a patchy economic recovery in some important parts of the world and on the prospect of a tax grab against the rich by Joe Biden’s administration in the US.

Nevertheless, the UK’s successful vaccination programme and reopening roadmap have seen a surge in orders at UK companies in April and optimism about the UK’s prospects is mounting.

The FTSE 100 was down 0.7% over the week and the FTSE 250 was 0.5% lower by the middle of Friday’s trading session.


The themes driving the world of tomorrow:  Lynn Hutchinson, Charles Stanley’s exchange-traded fund (ETF) specialist looks at today’s most-important investment themes here.

Central Banks: How do they get us out of the pandemic? In this Charles Stanley Radio podcast, we discuss the role and support of global central banks, as well as the ongoing battle between the Federal Reserve and the markets at large. Listen here.



The UK’s vaccination programme is proving a success. Covid-19 infections in adults of all ages fell by 65% after a first dose of an AstraZeneca or Pfizer vaccine, which scientists said showed the real-world impact of the nation's immunisation campaign against the pandemic. Crucially, the research was conducted at a time when a new and more infectious variant of the coronavirus, called B1.1.7, was dominant in Britain, but still found vaccination was just as effective in elderly people and those with underlying health conditions as it was in the young and healthy. The data came from two studies produced as a collaboration between Oxford University, the government's health department, and the Office of National Statistics.

There were further concerns raised about Johnson & Johnson's single-shot Covid-19 vaccine in the US. The Centers for Disease Control and Prevention (CDC) is investigating the death of an Oregon woman and the hospitalisation of another in Texas after receiving the shot. The incidents come as advisers to the CDC are set to meet on Friday to consider whether it is safe to resume use of the vaccine after distribution was halted last week due to concerns over blood clots.

Reports suggested the European Commission is working on legal proceedings against AstraZeneca after the drugmaker cut Covid-19 vaccine deliveries to the European Union. The move would mark a further step in an EU dispute with the Anglo-Swedish company.

Things usually turn out better than we feared: If there is one thing that many of us wish we could change about the past, it’s quite likely that we wish we had worried less about the future. Jon Cunliffe, Charles Stanley’s Chief Investment Officer, examines this phenomenon here.

We argue that watching vaccination numbers is the best proxy for working out the timings of economic re-openings here.


British companies saw a surge in new orders in April as the country lifted some of its Covid-19 restrictions, according to a survey released on Friday. The preliminary "flash" reading of the UK Composite Purchasing Managers' Index (PMI) rose to 60.0 in April from 56.4 in March, its highest reading since November 2013. The survey is further evidence that the UK is on the verge of a rapid recovery following the rapid rollout of Covid-19 vaccinations.

The cost of the pandemic pushed UK government borrowing to the highest level since the end of World War Two. In the year to March, the difference between spending and income through taxation hit £303.1bn. This is up almost £250bn on the previous year. However, the figure is not as bad as predicted by the Office for Budget Responsibility in the March budget.

Managing the pandemic debts: Investors often ask if the countries borrowing so much money to offset the cost of lockdowns can afford it – we look at how this is possible here.

Canada central bank became the first in a major economy to start tapering its asset purchases because of the strength of its economic recovery. The Bank of Canada signalled that it could start raising interest rates in late 2022 after it sharply boosted its outlook for the Canadian economy. The central bank reduced bond purchases to C$3bn per week from C$4bn. This is not expected to influence other central banks such as the Federal Reserve due to the differing nature of the Canadian economy. The US’s northern neighbour is a major commodity producer.

The European Central Bank (ECB) kept its policy unchanged and was inscrutable over when its massive monetary stimulus might start to be wound down. The market is keen to understand when the ECB will start to taper its asset purchases as Eurozone states ramp up fiscal stimulus and prepare to reopen their economies, clearing the way for a potential V-shaped rebound over coming months.

Reports from Washington suggest US President Joe Biden will propose a significant tax increase on the wealthiest Americans. The proposal would raise the top marginal rate and increase capital gains tax (CGT) to be taxed like wages for earners above £1m a year. The tax rise would help pay for childcare and education, but would not be used for healthcare, according to reports. However, the measure would be difficult to get through the Senate and may be political posturing.


British MPs declared that Uighurs and other ethnic and religious minorities in China's Xinjiang region are being subjected to genocide. The House of Commons on Thursday approved a motion calling on the government to act to fulfil its obligations under international human rights law. It is, however, non-binding. Prime Minister Boris Johnson has been under pressure to declare the events in Western China a genocide since President Biden’s administration made the accusation against Beijing in January. Mr Johnson argues the attribution of genocide is a matter for the courts, not politicians.

After weeks of tension over a build-up of Russian troops close to Ukraine's border, Russian Defence Minister Sergei Shoigu ordered several units back to their bases. The EU estimated that more than 100,000 Russian soldiers had been stationed near the border as well as in Crimea, which was seized and annexed by Russia in 2014. Mr Shoigu said aims of the “snap checks” had been achieved.


US President Joe Biden held his landmark virtual climate summit which aimed to put the US back at the vanguard of the ‘Green Revolution’ after his predecessor, Donald Trump, withdrew from the Paris agreement to cut greenhouse gas emissions. Mr Biden announced a new US target to reduce the country’s emissions by 50% to 52% before 2030, when compared with 2005 levels. Japan and Canada also raised their targets. The Americans assured other countries that it can meet that target, even if a new administration takes over, because industry is moving toward cleaner power, electric vehicles, and more renewable energy regardless.

Ahead of this week’s virtual summit on climate-change policies, China and the US found common ground. We look at their common interest here.

Garry White looks at whether soaring demand for basic materials such as copper could derail the climate agenda here.


Anne Longfield, a former children’s commissioner for England, launched a “landmark case” against the video-sharing app TikTok, alleging that it illegally collects the personal information of children. She lodged a claim in the high court on behalf of millions of children in the UK and the European Economic Area who have used TikTok since 25 March 2018, alleging the app is breaching UK and EU children’s data protection laws. Ms Longfield believes compensation payments could run into billions of pounds if the case goes against the Chinese group.

Garry White looks at how the importance of privacy in the West is giving Chinese developers the edge in technologies such as smart cities here.

Online grocery group Ocado announced a major push into autonomous driving technology. The company has set up a venture with another British company, Oxbotica, to build self-driving vehicles for itself and other companies that use its platform. That may include automatic forklift trucks at warehouses, self-driving delivery vans, or even "kerb to kitchen" robots for the final leg. Garry White looks at the robots marching into mass production here.

A global shortage of computer chips is continuing to hit automakers. Mercedes-Benz car maker Daimler raised its profit outlook for 2021 but said the global semiconductor chip shortage may continue to hit sales in the second quarter. Management said it assumed there would be some recovery in chip availability in the second half of this year but there was limited visibility at present. Carmakers cancelled orders at the start of the pandemic, fearing a slump in sales. However, the market was more robust than expected and automakers have been scrambling to secure supply.


Shoppers on the lookout for new clothes ahead of the easing of lockdown restrictions helped to lift retail sales by 5.4% in March, continuing a partial recovery that started in February. However, clothing sales remain significantly below pre-pandemic levels.

Amazon will launch its first high-tech hair salon in Spitalfields, London, as the online retailer makes a surprise move into the beauty sector. The salon will have an augmented-reality mirror showing clients different colours and styles before treatments. The venue will also have magazines loaded on to tablets, for browsing.

Online musical-instrument retailer Gear4music saw sales jump by almost a third in its full-year results thanks to an increase in people playing music during Covid-19 lockdowns.


US banking giant Citigroup will close its consumer banking operations in 13 markets across Asia, Europe and the Middle East because it "does not have the scale" to compete. The bank will instead run these operations from four hubs in Singapore, Hong Kong, the United Arab Emirates and London, offering products to larger clients and institutions.

Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.

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