The big local news of the week was the release of the preliminary results from the New Zealand referenda. While the numbers are not completely finalised, the results are all but certain. The End of Life Choice Referendum passed with a significant 65% approval (1.6 million in favour out of 2.4 million votes), while the Cannabis Referendum failed with 53% No to 46% Yes (1.3 million No’s out of 2.4 million votes) (Electoral Commison, 2020).
The End of Life Choice Referendum was a binding, with the End of Life Choice Act 2019 behind it having already been passed in parliament – it passed its third reading on the 13th of November last year and received royal assent on the 16th (New Zealand Parliament, 2019). This means the act will come into force 12 months after the final results on November 6th (Radio New Zealand, 2020). You can take a look at the act here. The failure to pass the Cannabis Referendum means that recreation cannabis remains illegal, although, it does not affect the legality of medicinal cannabis (New Zealand Government, 2020).
Staying with NZ politics, the Labour party and the Greens have done a deal (Walls, 2020). The deal gives the Green party co-leaders- Marama Davidson and James Shaw- positions as Minister for the Prevention of Family and Sexual Violence and Minister of Climate Change, respectively (53rd Parliament of New Zealand, 2020). Additionally, the Greens get the support of the Labour party in nominating a member as the Chair of a Select Committee and another member as a Deputy Chair for a different Select Committee. In exchange, the Greens have agreed to not oppose Labour on matters of confidence and supply, meaning they will not vote to say they have no confidence in the government, nor will they vote against spending bills the government proposes. The two parties will also work together to achieve the goals of the Zero Carbon Act, protect the environment and biodiversity, and improve child wellbeing and marginalised communities.
In the U.S., the general election will take place in just a few days. National polls have Biden in the lead at 52%, with Trump trailing at 43% (The Visual and Data Journalism Team, 2020). However, polls aren’t always correct as proven by the last US election when Trump beat Clinton despite polls saying otherwise. And, as always, the electoral college provides a chance that Biden wins the popular vote but loses the electoral college. Due to the pandemic, many people have already cast their votes in the U.S., with the early vote statistics already surpassing that of the last election, with approximately 90 million votes cast (McDonald, 2020).
On the pandemic front, cases have now surpassed 46.2 million and deaths are closing on 1.2 million (Worldometer, 2020). Global daily cases and the seven-day moving average are both setting records, while the global daily deaths have been ticking up and are reaching levels not seen since late March/early April. The U.S. has also been setting records, with over 100,000 cases recorded in one day. The U.S. is now in what people are calling ‘The Third Wave’, although it is arguable if the first and second waves ever ended. U.S. cases have surpassed 9.3 million and deaths are over 235,000. Meanwhile, Europe has truly entered its second wave, with daily cases hitting records in France, Spain, Italy, Germany, Belgium, and others. This has led to new restrictions to prevent the spread, although governments are loath to implement national lockdown measures for fear of the impact on the economy. However, France has imposed a one-month nation lockdown and Germany will go into a partial lockdown (BBC, 2020). Despite Boris Johnson’s attempt to avoid a national lockdown by locking down certain regions, he has just announced a second national lockdown for four weeks in England, after which restrictions will be eased, with regions going back to a tiered system (BBC, 2020). This comes after Johnson ignored expert scientific advice weeks ago that England should go into a two-week ‘circuit breaker’ lockdown.
Looking at the markets, the second wave in Europe and the associated restrictions has led to a precipitous decline in European stocks. The German DAX dropped 8.7% for the week, the STOXX 50 Europe dropped 7.5%, and the FTSE 100 dropped 4.8% (lockdown was announced after the UK markets closed, so expect a drop on Monday). The U.S. also had a bad week, with the S&P 500, NASDAQ, and Dow Jones down 5.6%, 5.5% and 6.5%, respectively. This was caused by election worries, rising case numbers, and the lack of stimulus. Asian and Pacific markets performed better but were still weighed down by Europe and the U.S. The NZX 50 was down 3.1% and the ASX 200 was down 3.9%, while the Hong Kong Hang Seng fell 3.26% and Japan’s Nikkei 225 only fell 2.3%.
For my portfolio, it was a bad week down 1.6% (on an absolute basis). However, it wasn’t as bad as it could have been, given my portfolio’s low weighting to Europe (other than the UK) and high weighting towards Asia/Pacific.
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References
53rd Parliament of New Zealand. (2020). New Zealand Labour Party & Green Party of Aotearoa New Zealand Cooperation Agreement. Wellington: House of Representatives New Zealand.
BBC. (2020, October 31). Covid: What are the lockdown rules in place across Europe? Retrieved from BBC: https://www.bbc.com/
BBC. (2020, November 1). Covid-19: PM announces four-week England lockdown. Retrieved from BBC: https://www.bbc.com/
Electoral Commison. (2020, 10 30). Referendum Results. Retrieved from Elections: https://www.electionresults.govt.nz/
McDonald, M. (2020, October 31). 2020 General Election Early Vote Statistics. Retrieved from U.S. Elections Project: https://electproject.github.io/
New Zealand Government. (2020). Cannabis legalisation and control referendum. Retrieved from New Zealand Government: https://www.referendums.govt.nz/
New Zealand Parliament. (2019). End of Life Choice Bill. Retrieved from New Zealand Parliament: https://www.parliament.nz/
Radio New Zealand. (2020, October 30). Euthanasia referendum expected to pass in initial vote count - Catherine Marks. Retrieved from Radio New Zealand: https://www.rnz.co.nz/
The Visual and Data Journalism Team. (2020, October 31). US election 2020 polls: Who is ahead - Trump or Biden? Retrieved from BBC: https://www.bbc.com/
Walls, J. (2020, October 31). Deal done: Greens accept ministerial portfolios. Retrieved from New Zealand Herald: https://www.nzherald.co.nz/
Worldometer. (2020, October 31). COVID-19 Coronavirus Pandemic. Retrieved from Worldometer: https://www.worldometers.info/
