Brief : UK borrowers who have seen their income fall due to the COVID-19 crisis may soon be paying thousands of pounds more in monthly repayments as one in three (32%) borrowers consider staying on their lender’s Standard Variable Rate (SVR) once their existing mortgage product expires, according to new research from Legal & General Mortgage Club. 32% of borrowers who have been negatively financially impacted by the pandemic say they are likely to move onto their lender’s Standard Variable Rate (SVR) rather than remortgage. These buyers could face a £2,500 annual increase in their repayments if they don’t consider their remortgage options, impacting their finances which may already be stretched. One in two (50%) homeowners are also concerned that their decision to take a payment ‘holiday’ will affect their future ability to borrow. For homeowners whose finances have been adversely impacted by the pandemic, exploring their mortgage options is essential to understanding where better alternatives are available, but the research suggests that the impact of COVID-19 is deterring thousands of borrowers with maturing loans from remortgaging. This could impact over 700,000 borrowers who will reach the end of their two- and five-year residential fixed-rate mortgages in 2021.
Brief: The pandemic has had a dramatic impact on the entire economy, and the insurance business is no exception. The socially distanced environment has forced many insurers to focus on technology that can help customers purchase insurance, interact with their policies and file claims online, according to Deloitte. In addition, companies are focusing more on providing more comprehensive offerings instead of point solutions. The Insurtech Numbers: The good news for the insurtech industry is that the pandemic didn’t appear to negatively impact overall investment. In 2020, insurtech funding hit a record $7.1 billion, according to WillisTowersWatson. Total funding was up 12% and the total number of funding deals were up 20%. In the fourth quarter of 2020, property & casualty (P&C) insurtechs accounted for 67% of the $2.1 billion in funding raised.
Brief: Juggling homework, friends and his personal YouTube channel, 12-year-old Kwon Joon is often too busy to check on his investments – not that the South Korean schoolboy is too concerned. With impressive returns of 42% since he began dabbling in the stock market last year, Kwon believes online trading can safeguard his financial future, in a world made increasingly insecure by the economic fallout from COVID-19. “To be honest, I sometimes forget to check my stock account because of my school work or when I’m playing with my friends,” said Kwon, who has made 14 million won ($12,364) in profits since he invested 25 million won in seed money last April. “I’m going to take the shares with me until I become an adult. I think this is the benefit of investing in stocks as a young person because you can invest in it for the long term,” he told the Thomson Reuters Foundation from southern Jeju Island. From South Korea to the United States, a growing number of teens and young adults born after 1996 – dubbed Generation Z – are turning to online investment platforms that offer the chance to make a living with a swipe, but often pose unforeseen risks.
Brief: Investors are turning their attention to prospects that higher taxes could threaten the rally in U.S. stocks as President Joe Biden's administration moves forward with its agenda and seeks ways to pay for its spending plans. In recent days, investors have focused on a rise in bond yields that has pressured share prices, though indexes remain close to their record highs. Nevertheless, some worry that at least a partial rollback of the corporate tax cuts that fueled stock gains during the Trump era could eventually drag on equities, whose valuations have already grown rich by some measures. "It is an issue," said Quincy Krosby, chief market strategist at Prudential Financial. "It's going to be talked about as it becomes a reality. But the market's focus right now is clearly on getting to the other side of this pandemic." The S&P 500 has gained more than 4% this year, with Biden's newly passed $1.9 trillion coronavirus relief plan providing the latest fuel for the economy and the stock market. The pace of the economic recovery and COVID-19 vaccinations will remain in investors' focus next week, along with the rise in U.S. bond yields that has pressured tech and growth shares and further supported bank and other value stocks.
Brief: A rebound in the technology sector pushed U.S. stocks into the green and Treasury yields retreated from the highest levels of the day as investors weighed the risk of inflation with economic growth accelerating. The yield on the benchmark 10-year Treasury had spiked earlier after the Federal Reserve let a capital break for big banks expire. Crude oil rebounded after tumbling Thursday. The S&P 500 edged higher, led by the energy and communication services sectors. JPMorgan Chase & Co. and other banks weighed on the Dow Jones Industrial Average in the wake of the Fed ruling. Facebook Inc. helped the tech-heavy Nasdaq 100 rebounded from Thursday’s 3.1% slump. Traders are bracing for quadruple witching Friday, a major expiration of options and futures contracts that can exacerbate swings in asset prices. “What we have to watch out for is a persistent rise in inflationary expectations and that’s how the rise in the 10-year Treasury could potentially get out of control,” said David Donabedian, chief investment officer of CIBC Private Wealth Management. “That’s today probably the biggest risk for the stock market.”
Brief: Last year, it was tough to find an asset class that was underperforming. U.S. stock benchmarks rose in 2020, after plunging at the onset of the coronavirus pandemic. Government and corporate bond prices rose as yields contracted. Bitcoin quadrupled. Gold rose 24%. That uniform outperformance has been a lot harder to come by thus far in 2021. All three major stock averages have hit highs on multiple occasions, but the Nasdaq (^IXIC) has fallen about 7% since its most recent record on Feb. 12. Bitcoin (BTC-USD) has suffered a couple of double-digit percentage pullbacks, although it remains higher year-to-date. Many of the declines in risk assets have been triggered by rapid increases in Treasury yields, reflecting markets digesting the potential for inflation and the Federal Reserve's willingness to let the economy run hot. Now one of the best-known macro strategists, Mohamed El-Erian, is saying that because of the Fed's current policy, investors should get more active. "It's going to be an environment for very active management, building portfolios from a bottom-up perspective," El-Erian tells Yahoo Finance Live.