I hope that you are keeping safe and well. Depending on where you are reading this will dictate the current Covid restrictions you are currently following. Looking back, although my experience of the lockdown 2.0 in England was not as restrictive as the first, we will have to see how effective the various lockdowns and subsequent tier system measures were in due course.
In the last few weeks, we have finally seen some positive news in what has been an incredibly tough year; namely about the number of possible vaccines for the virus. Firstly, Pfizer and BioNTech announced trial results which were incredibly encouraging, which was quickly followed by similar results from Moderna, and the initial results from the Oxford University vaccine soon after. Following this, Pfizer have just announced their approval from the MHRA, and the vaccine will be rolled out as early as next week.
On the day the Pfizer and BioNTech results were announced, the FTSE100 increased by over 5% immediately, finally closing the day over 4% higher. I believe this shows how the investment markets, and indeed ourselves, are looking for the light at the end of the tunnel. Let us hope that more of these vaccines indeed pass all the regulators tests and are available as early as this month.
On a more downbeat note, we are still seeing a rise in Covid cases, not only here, but across Europe and in the US. This has tempered some of the rises that we have seen in the markets. However, the FTSE100 has risen over 12% from the start of November, which is very welcome news for your investment portfolios. At the moment, the markets are very much weighing up the short term with cases rising, against the longer term prospects of successful vaccines.
Brexit is very much back in the news as the deadline to agree a deal with the EU approaches at the end of this year. The outcome of these negotiations will certainly have an impact on our investment markets. Although there appears to be ‘tentative’ possibility that a deal can be agreed, we will wait for further news on this.
In the US, we have recently seen the results of their presidential election. Although it is clear that Joe Biden has won, as we know, President Trump has so far not conceded defeat. His legal challenges are declined on an almost daily basis and the results for the individual states will soon have to be certified. Even if President Trump never concedes defeat, on 20 January 2021, Joe Biden will inevitably become the next President.
Since the election, the US investment markets have hit record highs; and the Dow Jones Industrial Average had its best month since January 1987 in November, as the index passed 30,000. However, I suspect this may be a reflection of the positive vaccine news, in addition to the reaction to Joe Biden being the next President.
Away from the election in the US, there is another government shutdown pending in December. However, optimism appears to be growing that a ‘stopgap’ stimulus package can be agreed to avoid this from happening.
Finally, as we count down to Christmas and look forward to the New Year, let’s hope that the optimism with the vaccines is not unfounded and that we finally start to see a return to normality in early months of 2021. As always, if you need to discuss any aspect of your investments or financial planning please do not hesitate to contact us.
Richard Brazier – Director – Hanover Financial Management Limited