Market Overview – 12/01/2021

Global equity markets had a significantly positive start to 2021, including the US which stole the headlines given the Democrats’ win of the two available Senate seats and the dramatic events that followed. The Democrat’s victory sparked a controversial protest by Republican supporters who supporters who stormed the Capitol. Despite the clash, markets remained relatively unphased and more positively concerned by the Senate result as US equities climbed roughly 1.5% for the week. Given the backing by the Senate, President-Elect Joe Biden will have a better chance in implementing his sustainable agenda as well as rolling out a larger stimulus package which is still yet to be detailed.

Elsewhere, the UK restored its losses from the week prior as the FTSE 100 climbed over 6%. This reflects the general optimism for the market amid the furlough scheme extension until April and the roll out of more than 2.4 million vaccine jabs despite the nation going into its third lockdown just before the New Year.

Looking more sector-focused, the energy sector responded positively to higher oil prices as Saudi Arabia agreed to reduce production, while miners and financials rose reflecting optimism about global economic recovery later in the year. This goes hand in hand with gold’s fall in value, as attention shifts away from safe havens and more towards equities.