Market Overview 24/11/2020

Last week, equity markets continued to be dominated by positive vaccine news which enabled another positive outcome for most markets. However, the ‘law of diminishing returns’ meant that positive news from Moderna and the FDA filing by Pfizer / BioNTech on Friday had less impact than the initial news earlier in the month. That said, the hope of a societal and economic normalisation by the end of next year boosted expectations for oil demand and took energy company share prices higher.

Elsewhere, President Trump still has not conceded the US election but maybe his heart isn’t really behind the legal challenges to the results. Meanwhile, President Elect Biden is progressing with his preparations announcing key appointments. Markets will be looking at his choice for Treasury Secretary to gauge the chances of a near term stimulus package. However, this may have to wait until after the Georgia senate runoff elections in early January and Biden’s inauguration on the 20th of that month.

Investors still expect a trade agreement to be agreed between the UK and EU, but time is running out. Any agreement would be taken positively but it is likely to be a pale imitation of our present trading arrangements. It will be interesting to see how honest the Chancellor is in his spending review on Wednesday. Our economy has needed support this year, but he will find that it is a lot easier to increase spending than to take it away.