Martin Vander Weyer

Do stock markets foretell the future while politicians fudge and economists mumble? No: share prices collectively have a life of their own — driven by herd mentality, weight of money and the available range of investment choices — which indicates little more than the simple fact that what goes up must one day come down and vice versa. Both the FTSE100 and America’s S&P500 indices lost a third of their value between late February when the pandemic began to look serious and a month later when the rate of virus transmission was at its height. So far, so logical. But since then, both have sustained rallies that defy all public and corporate pessimism. Now, just as shops and factories are reopening, both markets look ‘overbought’ and wobbly again.

Should the government be prepared to take equity stakes in major companies that will struggle to survive the current crisis? That’s a question already on the table in relation to Jaguar Land Rover and Tata Steel, and likely to arise for British Airways, aero engine maker Rolls-Royce and others. We’re told Chancellor Rishi Sunak is working on a plan, called Project Birch, to bail out ‘viable companies which have exhausted all options’ and whose collapse would ‘disproportionately harm the economy’. That means large-scale loan support first, with conversion to equity as a last resort — and to some pundits it smacks of the 1970s interventionism that left swathes of under-performing British industry addicted to state subsidy.

The Royal Mail worker who rang my bell to deliver an Amazon package on Friday was wearing a glittery ball gown because she and her colleagues were fundraising for local hospitals: ‘Two thousand quid so far,’ she said cheerily as she accepted my donation and thanks. But if I had asked her what she thought of the performance of her ultimate boss Rico Back — chief executive of Royal Mail until his sudden departure after less than two years in the job — I suspect she might not even have recognised his name, so remote has this German-born, Swiss-resident big shot been from the front line of his organisation’s role in keeping us all in touch with each other during the lockdown.

Keep your eye on GlaxoSmithKline. The UK-based multinational drug-maker represents the future, both as a mass-producer of the vaccines that we pray will finally defeat Covid-19 and as a beacon of the way shareholder capitalism will re-position itself in the post-pandemic era. GSK last week announced a collaboration with its French rival Sanofi to create a Covid-19 vaccine that it aims to manufacture at the rate of ‘hundreds of millions of doses annually’ by the end of next year. That’s 20 months before we might begin to feel safe again but still ‘a significantly faster timeline than for normal vaccine development’.

Ah yes, the banks. They weren’t in the front line when the crisis began, but it wasn’t going to be long before they came in for a kicking. Sure enough, they’ve just had one for throwing bureaucratic hurdles and demands for personal guarantees in the way of the government’s business interruption loan scheme and for resisting a Bank of England directive to cancel £7.5 billion of dividends to shareholders, cash that would be better used to bolster reserves against a coming tide of bad debts. They backed down on both issues but, disliked and distrusted as they have been since 2008, they’ll always be a target for snipers — and bank bosses need to remember two things.

The suspension of the residential property market is disheartening for those who were hoping to buy a first flat or new-build house this spring. But spare a thought also for estate agents, who are usually well back in the queue for public sympathy but are nevertheless a familiar part of our high-street fabric, their windows and websites feeding the national aspiration to home ownership that also fills so many hours of Kirstie-and-Phil television. With government urging completions to be deferred, mortgage lenders tightening their terms, viewings and removals impossible and shares in the bellwether London agency Foxtons down by half, the whole sector is now in what Niraj Shah of Bloomberg Economics calls ‘an induced coma’.

The world needs airlines — and, barring Armageddon, will still have some when this crisis is over. It will also still have aircraft, pilots and airports. The aviation industry, accustomed to volatility as it is, should be well capable of restructuring and regrowing in response to renewed demand, even if bankruptcies are left behind. I know that sounds glib, but airlines on both sides of the Atlantic have been loud in calling for state aid as traffic has collapsed — and in the cruel process of deciding how governments can equitably relieve the virus’s financial impact on every business and family, all such claims demand scrutiny.