Post-lockdown euphoria, or at least the loosening of restrictions that have dogged us for the past few months, boosted stock markets around the world in the past week.
It is hard not to walk with a spring in your step when the beach you have been unable to visit for two months suddenly becomes available again. Facilities that you hardly used in the past have enhanced appeal, even if social distancing rules remain in place.
Just because investors would all like to see a V-shaped recovery, and keep their money invested for it, does not mean this is going to happen.
But I could not help agreeing with the chief executive of Wizzair, Jozsef Varadi, speaking at Dubai’s virtual Arabian Travel Market last week when he said the global economic recession now coming would actually prove a bigger problem than the coronavirus pandemic itself.
The International Monetary Fund has this down to be the worst recession since the Great Depression of the 1930s. Investors ought to be feeling singularly cautious, not racing to bid up the stock market.
In such a climate, the best investment advice may be to do nothing to your portfolio if you really are a very long-term investor.
Simply missing out on a few of the markets’ best days can seriously compromise your long-term performance that is dependent on the math of compounding gains over a very long period of time.
But if you have any immediate or near-term requirement to draw on your savings then go into cash. Just because investors would all like to see a V-shaped recovery, and keep their money invested for it, does not mean this is going to happen.
That is a triumph of hope over experience, not a sensible approach to wealth management. Share prices represent discounted cash flow and the direction it is heading is down and not up, or at least certainly not quickly back to pre-crisis levels.
Bond yields are being artificially held down by central banks. But that leaves bond prices held artificially high. Can this last forever? So, here are nine cautionary random economic data points to bring the optimists back down to earth, and perhaps prevent them from losing their hard earned savings:
1. US unemployment rate
The unemployment rate fell to 13.3 per cent in May from a peak of 14.7 per cent in April and over 40 million Americans have filed for unemployment benefits during the crisis. What does the removal of discretionary spending by these people mean for the US economy? Just how many will be re-employed as the economy recovers? How long will this take? Will there be more social unrest?
2. Global unemployment rates
Unemployment is also soaring across the rest of the world, but in the UK and Europe, government-sponsored schemes are hiding the true picture. Imagine what will happen when these expensive support programmes are withdrawn.
3. PMI data
Purchasing Managers' Indexes are at all-time lows. In the euro zone, the IHS Markit’s Composite PMI jumped to 31.9 in May from 13.6 in April. But this is still the second lowest figure on record and indicates a commensurately deep business recession in progress now.
4. Asia's factories
Asia’s factories have remained in the doldrums even as the lockdown lifts. PMI data from Japan, South Korea and Taiwan fell last week, while the numbers for Vietnam, India, Malaysia, Thailand and the Philippines remained well below 50, the dividing line between expansion and contraction.
5. China's growth rate
China has abandoned its official growth target of 6 per cent for 2020. The second largest global economy reported a 14.2 per cent drop in imports in April, although demand for pharmaceutical products and medical supplies helped exports edge 3.5 per cent higher.
6. Britain’s economic output
The British economy could shrink 13 per cent this year, its deepest recession in 300 years, according to the government’s Office for Budget Responsibility. The OBR expects economic output to crash 35 per cent from April to June with unemployment soaring to 10 per cent; and the government’s expected budget deficit of $342 billion (Dh1.26 trillion) in the 2020/2021 tax year will be 14 per cent of GDP – higher than in the Great Recession of the 1930s.
7. Oil prices
Oil prices have bounced back from under $10 to around $40 a barrel. But this remains almost 50 per cent off recent highs. Gulf governments have leveraged a low borrowing cost environment and successfully issued bonds at low interest rates.
8. Car sales
American auto sales are so bad that the industry refuses to publish monthly sales data. British new car sales plummeted 97 per cent in April, the worse performance since the Second World War. In Russia, auto sales fell 72 per cent in April with less than 40,000 vehicles sold. Indonesian car sales plunged to 7,871 cars sold in April from 84,056 in the same month a year earlier, according to the country's largest auto distributor Astra International.
9. US retail
US retail chains filing for bankruptcy this year include: Papyrus, Kroger, Earth Fare, Noah’s Event Venue, Pier 1, Art Van Furniture, Modell’s Sporting Goods, FoodFirst Global, J. Crew, Neiman Marcus, Stage Stores, Garden Fresh Restaurants, JC Penny, Tuesday Morning and Le Pain Quotidien (but not its Belgian parent company). There will be many more casualties worldwide as shopping moves online and malls empty.
Peter Cooper has been writing about Gulf finance for 25 years
The squad traveling to Brazil:
Faisal Al Ketbi, Ibrahim Al Hosani, Khalfan Humaid Balhol, Khalifa Saeed Al Suwaidi, Mubarak Basharhil, Obaid Salem Al Nuaimi, Saeed Juma Al Mazrouei, Saoud Abdulla Al Hammadi, Taleb Al Kirbi, Yahia Mansour Al Hammadi, Zayed Al Kaabi, Zayed Saif Al Mansoori, Saaid Haj Hamdou, Hamad Saeed Al Nuaimi. Coaches Roberto Lima and Alex Paz.
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
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Essentials
The flights: You can fly from the UAE to Iceland with one stop in Europe with a variety of airlines. Return flights with Emirates from Dubai to Stockholm, then Icelandair to Reykjavik, cost from Dh4,153 return. The whole trip takes 11 hours. British Airways flies from Abu Dhabi and Dubai to Reykjavik, via London, with return flights taking 12 hours and costing from Dh2,490 return, including taxes.
The activities: A half-day Silfra snorkelling trip costs 14,990 Icelandic kronur (Dh544) with Dive.is. Inside the Volcano also takes half a day and costs 42,000 kronur (Dh1,524). The Jokulsarlon small-boat cruise lasts about an hour and costs 9,800 kronur (Dh356). Into the Glacier costs 19,500 kronur (Dh708). It lasts three to four hours.
The tours: It’s often better to book a tailor-made trip through a specialist operator. UK-based Discover the World offers seven nights, self-driving, across the island from £892 (Dh4,505) per person. This includes three nights’ accommodation at Hotel Husafell near Into the Glacier, two nights at Hotel Ranga and two nights at the Icelandair Hotel Klaustur. It includes car rental, plus an iPad with itinerary and tourist information pre-loaded onto it, while activities can be booked as optional extras. More information inspiredbyiceland.com
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Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
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AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
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Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
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Paris%20Agreement
%3Cp%3EArticle%2014%3C%2Fp%3E%0A%3Cp%3E1.%20%5BThe%20Cop%5D%20shall%20periodically%20take%20stock%20of%20the%20implementation%20of%20this%20Agreement%20to%20assess%20the%20collective%20progress%20towards%20achieving%20the%20purpose%20of%20this%20Agreement%20and%20its%20long-term%20goals%20(referred%20to%20as%20the%20%22global%20stocktake%22)%3C%2Fp%3E%0A%3Cp%3E2.%20%5BThe%20Cop%5D%20shall%20undertake%20its%20first%20global%20stocktake%20in%202023%20and%20every%20five%20years%20thereafter%C2%A0%3C%2Fp%3E%0A
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
One-off T20 International: UAE v Australia
When: Monday, October 22, 2pm start
Where: Abu Dhabi Cricket, Oval 1
Tickets: Admission is free
Australia squad: Aaron Finch (captain), Mitch Marsh, Alex Carey, Ashton Agar, Nathan Coulter-Nile, Chris Lynn, Nathan Lyon, Glenn Maxwell, Ben McDermott, Darcy Short, Billy Stanlake, Mitchell Starc, Andrew Tye, Adam Zampa, Peter Siddle
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Power: 502hp at 7,600rpm
Torque: 637Nm at 5,150rpm
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0-200kmh 5.5 seconds
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Wimbledon order of play on Saturday, July 8
All times UAE ( 4 GMT)
Centre Court (4pm)
Agnieszka Radwanska (9) v Timea Bacsinszky (19)
Ernests Gulbis v Novak Djokovic (2)
Mischa Zverev (27) v Roger Federer (3)
Court 1 (4pm)
Milos Raonic (6) v Albert Ramos-Vinolas (25)
Anett Kontaveit v Caroline Wozniacki (5)
Dominic Thiem (8) v Jared Donaldson
Court 2 (2.30pm)
Sorana Cirstea v Garbine Muguruza (14)
To finish: Sam Querrey (24) leads Jo-Wilfried Tsonga (12) 6-2, 3-6, 7-6, 1-6, 6-5
Angelique Kerber (1) v Shelby Rogers
Sebastian Ofner v Alexander Zverev (10)
Court 3 (2.30pm)
Grigor Dimitrov (13) v Dudi Sela
Alison Riske v Coco Vandeweghe (24)
David Ferrer v Tomas Berdych (11)
Court 12 (2.30pm)
Polona Hercog v Svetlana Kuznetsova (7)
Gael Monfils (15) v Adrian Mannarino
Court 18 (2.30pm)
Magdalena Rybarikova v Lesia Tsurenko
Petra Martic v Zarina Diyas
The Cairo Statement
1: Commit to countering all types of terrorism and extremism in all their manifestations
2: Denounce violence and the rhetoric of hatred
3: Adhere to the full compliance with the Riyadh accord of 2014 and the subsequent meeting and executive procedures approved in 2014 by the GCC
4: Comply with all recommendations of the Summit between the US and Muslim countries held in May 2017 in Saudi Arabia.
5: Refrain from interfering in the internal affairs of countries and of supporting rogue entities.
6: Carry out the responsibility of all the countries with the international community to counter all manifestations of extremism and terrorism that threaten international peace and security
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The five pillars of Islam
