At the annual Jackson Hole Economic Symposium (held virtually for the first time this year), the Federal Reserve Chairman Jerome Powell announced a shift in policy. The Fed will drop its longstanding practice of pre-emptively lifting interest rates to combat higher inflation and has declared that full employment will no longer act as a trigger to raise rates. These commitments intend to combat any perceived under-inflation which might have materialised during recent years.
Half a million residents have been ordered to evacuate their homes in the East Coast US states of Texas and Louisiana as Hurricane Laura approaches. The category four storm is expected to bring wind speeds of 150mph (240kmph) and is close to being upgraded to a category five storm. The storm reached landfall yesterday morning US time.
Europe’s second Coronavirus wave continues to spread through the continent with France’s R rate (reinfection rate) hitting 1.4, Spain’s infection rate topping the US’s and Italy recording its highest daily case toll since May. However, death rates remain much lower in this second wave; experts have speculated that this is due to the average age of new carriers falling as the younger generations start to return to work and leisure.
Amidst all of the chaos in the world, companies are still pushing ahead with their business plans. A good example of this was Facebook’s announcement this week that it will be rolling out a new ecommerce feature on its social media platform.
The new Facebook Shop section of its flagship app will allow users to find new businesses and shop for various products. The announcement was taken well by the market; Facebook’s share price is up almost 12% week to date, benefiting our portfolios.
Against a backdrop of noise from Coronavirus, natural disasters in the US, political tensions and social unrest, it’s encouraging to read such stories of companies getting on with business as usual and innovating where possible. We remain diligently focused on finding the companies doing this best; those that are able to continue growing and pursuing their growth strategies whilst the tides swirl around them.
Quote of the week
“We find ourselves in a unique situation - having an iconic slogan that doesn't quite fit in the current environment.” (KFC Spokesperson).
Global fast food giant KFC – incidentally owned by Yum! brands, a company held within our portfolios – says it is halting its iconic “Finger Lickin’ Good” slogan given the current hygiene advice because of the Coronavirus pandemic. The company revealed its new look through a YouTube video, showing the slogan pixelated on posters and its food "buckets", saying: "That thing we always say? Ignore it. For now.“ We’re no experts on fried chicken eating protocol but aren’t you already eating it with your hands…?
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