In plenty of free time and abundant distractions, it is very difficult to stay commercially aware. But don’t worry, we are here to help. Today, we bring you the top five stories of this week that you would not want to have missed.
US fiscal stimulus
The US’s $2 trillion fiscal stimulus moved one step closer to reality following the US Senate’s approval of the fiscal boost. Now, all it needs to become reality is an approval from the House of Representatives.
The package aims at limiting the damage from the coronavirus outbreak. Of the $2trillion, $867 billion is set aside as loans and grants to small and big businesses affected by the coronavirus. This huge injection is perhaps increasingly important for the US and is likely to be increased in the coming months as the US on Thursday became the country with the largest number of confirmed coronavirus cases in the world.
UK Housing Market
The UK government on Thursday issued its advice on home moving during the coronavirus outbreak. It essentially advised buyers and sellers to delay transactions. The advice also directed that those who are seeking to sell should not allow any visitors into their homes. This means that the purchase market is likely to experience a freeze as potential buyers will not be able to view homes, and neither will property agents. For example, the ability to carry out market appraisals or take internal photographs prior to marketing homes will be obstructed.
Already, research predicts that there will be a decline of 60% in the number of sales over the next three months. It does not take much to see how the UK government’s advice will contribute to this freeze.
Banks have also started mitigating their losses in the housing market by, for example, ceasing mortgage offers unless customers have a deposit of at least 40 per cent of the value of the property. Some have said, such decisions and anxieties and changes show the recalibration of risk that is unfolding in the Covid-19 mortgage market.
The Tokyo 2020 Olympic Games were finally postponed on Tuesday. This comes after months of speculation and pressure on Japan and the IOC by countries such as Canada and Australia which withdrew from the games.
The games have been postponed until next year. There has been no new date set but the IOC has said that the date should not be later than summer 2021. Hopefully, a year is long enough to ensure that the world is free from the threat of coronavirus and global travel and tourism which the Olympics relies on, returns to be the order of the day. In the meantime, the priority is to recalculate the financial and logistical costs of postponement.
The G20 has pleaded to inject $5 trillion in fiscal spending into the global economy in addition to other large-scale economic measures. The aim is to soften the impact of coronavirus and overcome the pandemic. The G20 also asked the IMF and the World Bank Group to contribute to the fight by supporting countries in need with the instruments the IMF and World Bank possess.
In terms of the health battle, the G20 has committed to strengthening the WHO’s mandate in the fight against pandemics, including the delivery of medical supplies, diagnostic tools, treatments, medicines, and vaccines.
The G20 measures have been well received by the market especially since it sends a strong signal by the G20 to put squabbles aside and focus on overcoming the pandemic and restoring confidence in the global economy as soon as possible.
The Wrong Zoom
Since the coronavirus outbreak, the share price of most companies has dropped dramatically. Airline and travel companies like EasyJet and TUI have been badly hit. With promises and reality of government cash injections have come the occasional jumps.
But one company that has experienced impressive gains and has seen its shares double since the beginning of the year is Zoom Video Communications Inc (ticker: ZM). Zoom is a market-leading video communication company that makes video conference software. With remote working being the order of the day as a result of national lockdowns, Zoom’s software is now in high demand and so are its shares. It is now worth $40.3 billion and it may continue to rise if investors keep buying.
Luckily for investors and their brokers, following the U.S. Securities and Exchange Commission suspended trading in Zoom Technologies (ticker: ZOOM) on Thursday, investors are now less likely to purchase the wrong shares by using the ticker symbol ZOOM, which will mean buying shares in a possibly defunct company versus ZM. Buying shares of $40.3billion in the wrong company sounds like a crude joke, but ZOOM has risen tenfold since the start of the year. All that money for the wrong shares?
What to watch for in the coming week?
FT just revealed that H&M is pressing its UK landlords for early exit terms in H&M leases in the event of no sales revival by June 2020. It will be interesting to see how many retailers will follow suit. It will also be interesting to see how WeWork will be affected when its tenants begin cancelling leases because of the pandemic.