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Issue 1,002, 5 June 2020. Subscribers: read the digital edition here

From Merryn Somerset Webb, MoneyWeek's editor-in-chief

You have to dig around a bit for good news at the moment – it isn’t in fashion. But here is some: in April, UK households paid off £5bn-worth of credit card debt and £2.4bn of personal loans (this week's magazine has some help on how to do this yourself). That’s the most on record. At the same time UK savings rates are on the rise: according to money management app Yolt, their users put 70% more into savings accounts in April than in February. They also put 63% more into various investments. Thanks to generous furlough schemes, the ability to take mortgage holidays (and so to focus on chipping away at higher-interest debt) and, of course, the full cancellation of many of our usual routes to overspending, we are saving more than we have in a long time – £16.2bn in April compared to around £5bn in a normal month. 

You will say this is temporary. You could be right. As soon as lockdown ends and the real tally of lost jobs begins to show, a large number of people will lose their ability to save very quickly. And many of those who have been forced into retrenching over the last few months but who also hang on to their incomes post-lockdown will return to their old habits sharpish (note the three-hour queue outside Ikea at the weekend). 

But the key point is that many households have used the crisis period to build resilience into their household balance sheets. This should feel pretty good (listen to my latest podcast with ex-Bank of England governor Lord King on how this worked for the UK as a whole on the way into the Covid crisis). It may become a new habit. It may not be possible for it to become a new habit. But it does mean that as we come out of the crisis, people will be in a much better position than they might have been – something that suggests that the V-shaped recovery the stockmarket is expecting remains a genuine possibility (we talk about the extraordinary recovery of equities since March in this week's magazine, and Cris Sholto Heaton gives his thoughts on why valuations still matter).  

Commodities look cheap

With that in mind you might start to turn your eye to the commodity sector, an area we haven’t (bar precious metals) been much interested in for a while. The S&P Dow Jones Commodity Index is down around 5% a year over the last decade and commodity stocks as a whole are currently trading at an 80% discount to the S&P 500 (see, for example, how the oil market is moving). Contrarians will sense an opportunity there.

Resilience should not just be the thing to look for in your household balance sheet. It is also the new buzz word in investing. Long-term investors will increasingly want to be sure that the companies they hold are focused more on being able to weather crises than they are on ramping short-term stock price performance via borrowing and buybacks. How do you make sure you do this too? See our cover story on page 20 for thoughts on the process and the best picks. If you run a small business, State aid is winding down – make sure you are as ready as you can be. 

Finally, a word on one of your favourite subjects, house prices. Post-lockdown the great fear of property owners (and great hope of would-be buyers) is that post-lockdown prices will fall fast. Will they? Max King thinks not.