I Don’t Like Mondays

Before the Covid-19 lockdown many of us faced that Monday morning feeling with the commute to work and the start of another working week. Some of you that have been self-isolating may be looking forward for the long-awaited return of that Monday morning feeling!

However, will rush hour be consigned to history?

The government is alert to the risk of a second wave of infections and an even greater economic shock.  Employers need to ensure the safety of workers and customers but require firm directives from the government to avoid breaking guidance and to ensure effective insurance is in place. While we have testing and tracing, until a vaccine becomes available then social distancing remains the primary defence.

All businesses are different so will face different challenges. Many offices may continue to operate from home and many factories may be able to function at a reasonable level of production with social distancing.

What about getting to work? While many can walk, cycle or drive to work, others will still have to rely upon public transport. The government has proposed staggered shift patterns but will public transport be able to cope with a pick-up in passenger numbers and stay safely within social distancing rules? A leaked Transport for London report suggests social distancing would mean it could carry 50,000 passengers every 15 minutes compared to 325,000 pre-Covid-19 –15% capacity!

As for international travel, airlines are furious as plans to implement a 14-day quarantine for anyone arriving in the UK ‘would effectively kill air travel’. Meanwhile New Zealand and Australia are discussing a safe zone of travel between the two countries but New Zealand’s PM Jacinda Ardern said ‘we will not have open borders for the rest of the world for a very long time’.

What about companies that cannot operate with 2-metre social distancing? The government has proposed workers may have to do their job within 2-metres of each other, but would require PPE. Where is this going to come from given the existing demand from the NHS and care services? Additionally, it may not be so much the case of ensuring 2-metre distancing, rather the time you spend in contact with someone else. Under the proposed guidelines, companies will have to draw up a Covid-19 risk assessment before allowing staff to return to work. However, it’s not just red tape – expect to see even more plastic protection screens and flooring distance marking tape everywhere.

The re-opening of Shanghai Disneyland this week could provide useful insights for leisure companies looking to re-start operations after lockdown. Face masks, contact tracing and temperature checks are among the prevention measures. However, the Chinese government is limiting initial visitor numbers to 24,000 which is 70% below normal daily capacity.  Would some UK businesses still be viable on a similar level of capacity if the government staff furlough support was removed?

Clearly some business models are going to find life in a post lockdown world far more challenging than others. Charles Darwin said ‘the species that survives is the one that is able to adapt to and adjust the best to the changing environment in which it finds itself’.

What have we been watching?       

More countries as well as some major US states started to lift lockdown restrictions with most opting for a gradual approach. However, President Trump stepped up his rhetoric with China describing the Covid-19 outbreak as the ‘worst attack’ ever on the US. ‘This is worse than Pearl Harbour, this is worse than the World Trade Centre’.

While lockdown has saved countless lives and prevented healthcare systems being swamped, has Covid-19 been stalking us much longer than officially recognised and before containment measures were in place? A blood sample from a patient diagnosed with pneumonia near Paris on 27th December was recently tested and came back positive for Covid-19. That would have been four days before the WHO regional office in China was formally notified of a pneumonia outbreak of an unknown cause in Wuhan.  The patient had not travelled but his wife worked at Charles de Gaulle airport.

On Sunday evening PM Boris Johnson addressed the country, or more specifically England and outlined the first sketch of a roadmap with a new alert system. He confirmed the relaxation of lockdown restrictions will be very gradual, but the message to industries such as manufacturing and construction is to return to normal as soon as practically possible. More detail will follow later today.

Read our latest UK investment insights from Alpha PM


In the UK, more than half of all adults are now paid by the state and Chancellor Rishi Sunak has warned that the cost of the government Covid-19 furlough scheme is not sustainable after 6.3million signed up (23% of UK workforce!). The Chancellor has said that there would not be a ‘cliff edge’ in July but does appear to be working towards a gradual phasing-out of the furlough scheme. The crux is how to avoid mass unemployment but is that possible? How many people are on furlough, credit card, mortgage and car loan payment holidays and what happens when these all end? The Bank of England (BoE) warned that the Covid-19 outbreak would push the UK towards its deepest recession on record, with a 14% contraction in the economy in 2020. However, the BoE expects the economy to re-bound by 15% in 2021.

Read our latest EU investment insights from Alpha PM


In Europe, the fault lines continue to emerge. Germany’s top court, The Constitutional Court ruled that the European Central Bank’s (ECB) mass-bond buying QE programme to support the eurozone economy during the Covid-19 outbreak violates the German constitution. The court has questioned whether the level of bond purchases is ‘proportionate’. This could clearly threaten the Bundesbank’s participation in the economic stimulus programme. The European Commission forecast that the eurozone economy could contract by 7.7% in 2020 but are expecting a re-bound in 2021 with growth of 6.3%. April PMI activity indicator readings for the eurozone confirmed that every country recorded unprecedented contractions and HIS Markit, that compiles the data believes that economic activity lost due to Covid-19 will not be recovered for several years.

Read our latest US investment insights from Alpha PM


The US said it wants to borrow a record $3trillion in the second quarter of 2020 to fund the Covid-19 support package. The US labour market report delivered the expected history-making declines although the 20.5million fall in non-farm payrolls was not as bad as some had feared.



Encouragingly, Chinese exports returned to growth in April although given the scale of lockdowns in Europe and the US this does appear surprising unless it reflects demand for PPE and key components to replenish western supply chains. However, imports fell by 14%, a steeper drop than in the previous month.

Read our latest investment insights from Alpha PM


Brent oil recovered to $29 as more countries announced they would begin easing Covid-19 lockdown measures and OPEC+ supply cuts continue to be introduced.

Finally, Czech billionaire Daniel Kretinsky, who owns Sparta Prague football club, has acquired a 5.3% stake in Royal Mail prompting takeover speculation. Does this mean that a ‘Czech is in the post’?


Read Last Week’s Alpha Bites – The Single Greatest Logistical Challenge


Further information about Alpha Portfolio Management, our products and services, please visit www.alpha-pm.co.uk or email info@alpha-pm.co.uk. Alternatively, you can call us on 0117 203 3460.

This publication is for informational purposes only and should not be relied upon. The opinions expressed here represent analysis by an Alpha Portfolio Management representative at the time of preparation and should not be interpreted as investment advice.

You should seek professional advice before making any investment decisions. The past is not necessarily a guide to future performance. The value of shares and the income from them can fall as well as rise and investors may get back less than they originally invested. The sender does not accept legal responsibility for any errors or omissions, in the context of this message, which arise as a result of internet transmission or as a result of changes made to this document after it was sent.

Alpha Portfolio Management is a trading name of R C Brown Investment Management PLC which is authorised and regulated by the FCA.
Registered Office: 1 The Square, Temple Quay, Bristol, BS1 6DG. Registered in England No. 2489639
Copyright © 2020 Alpha Portfolio Management, All rights reserved

Full version