Global stock markets have had an amazing November so far, but we're not out of the woods yet.
The initial vaccine euphoria is under pressure as Covid-19 cases continue to tick higher, highlighting the gulf between discovery and distribution.
With several US states implementing further restrictions and another 70,000 hospitalisation cases, the impact on the economy remains in play.
Weak retail sales from the US also poured some cold water on sentiment, with the second wave having an impact on consumers’ propensity to spend. Continuation of any lockdowns in the festive season would also crimp citizens’ ability to travel, while the latest data has tended to suggest that a fiscal stimulus package is still required to energise a stuttering recovery.
Even so, the momentum of the previous vaccine announcement has been sufficient to propel markets higher. In the year to date, the Dow Jones index is now up by 4.4%, the S&P 500 11.7%, while the Nasdaq continues its stratospheric run and is currently ahead by 32.6%.
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The dominant theme this side of the pond remains Brexit, where negotiations are coming to a crescendo. Hopes are fading for an outcome which does not place undue further pressure on UK companies and therefore the economy given the time restraints, although the possibility of a last-gasp concession cannot be discounted.
Meanwhile, a slightly higher than expected inflation figure implied that there had been some effect ahead of the current additional lockdown, with a rise in food prices suggesting some further consumer hoarding. For the moment, inflation is a story for tomorrow and remains comfortably within the targeted range.
The FTSE 100 index has of late seen some benefit from the marking up of particularly beaten down share prices in light of the vaccine announcements. The likes of airline and airline-related shares, the oil majors and the banks have all risen in the last few trading sessions in anticipation of something like a return to normality next year on hopes of a global roll-out.
The index remains something of a global laggard, although the current level of a 16% decline in the year to date is a marked improvement to the previous level of being down by some 22% to 23%, where it had been for the vast majority of the time since the initial March declines.
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