Blog

27th January 2020

Monday Espresso

On Friday 24, Prime Minister Boris Johnson’s historic Withdrawal Agreement Bill was signed by the European Commission. The UK will officially leave the EU on 31 January 2020. The UK and EU have agreed a transition period up until the end of 2020 to agree a future trade deal.

Last week an extremely contagious virus was reported in China originating in the city of Wuhan. So far over 800 cases were reported in China and some travellers from China to the US, UK, Japan and Korea have also been reported. Worried about a global pandemic, China has locked down over 40 million people as a measure to contain it.

UK PMI data was reported on Friday 24, showing a rebound in growth for January. Output grew at the fastest rate in 16 months amid rising demand for both manufacturing and services. This strong economic indicator may stave off the prospect of a BOE rate cut on January 30.

As the global business leaders meet in Davos at the World Economic Forum, Prince Charles announced his “Sustainable Markets Initiative” to combat the climate crisis. The initiative aims to connect business leaders to move toward a carbon negative future.

US Fed Rate decision to be announced on January 29. Consensus expectations are for the Fed to keep interest rates unchanged at 1.75%.

On Thursday, January 30, the Bank of England will announce its rate decision. The market still expects BOE rate to remain unchanged at 0.75% but with recent mixed economic indicators, there are talks of an impending rate cut.

+0.65*

-1.0     A score of -1.0 indicates an extremely poor economic outlook, which is accompanied by a high probability of negative returns in risky asset classes like equities. The Risk Barometer tilts our portfolios away from equities during such periods.

0.0       A score of 0 indicates a neutral economic outlook with almost equal probability of positive and negative returns in risky asset classes like equities. The Risk Barometer maintains a balance between equities and other asset classes during such periods.

+1.0   A score of +1.0 indicates an extremely positive economic outlook, which is accompanied by a high probability of positive returns in risky asset classes like equities. The Risk Barometer tilts our portfolios towards equities during such periods.

*as at latest realignment 31/12/19

Notice:

The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated, but is not an indicator of potential maximum loss for other periods or in the future.

Risk Barometer

0

as at latest realignment

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    Copia Capital Management

    Fleet House, 8-12 New Bridge Street, EC4V 6AL

    Copia Capital Management is a trading name of Novia Financial Plc. Novia Financial Plc is a limited company registered in England & Wales. Register Number: 06467886. Registered office: Cambridge House, Henry St, Bath, Somerset BA1 1JS. Novia Financial Plc is authorised and regulated by the Financial Conduct Authority. Register Number: 481600.

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