Interactive Investor

Market snapshot: week begins with vaccine and Brexit in sharp focus

23rd November 2020 08:06

Richard Hunter from interactive investor

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Developments in the US and around ongoing Brexit discussions continue to dominate the headlines.

Markets are now caught in no man’s land, with investors increasingly desperate for the gap between the discovery and physical distribution of the vaccine to be minimised.

The rise in new Covid-19 cases – and indeed lockdowns – brings the need for a rapid roll-out of an acceptable vaccine into sharp focus. In the meantime, the human and economic damage continues unabated as governments remain well aware of the need for easing measures.

As such, the reported rift between the Federal Reserve and the Treasury in the US on the status of any fresh fiscal stimulus package adds unwelcome uncertainty in delaying the timing of any economic revival.

Although still in positive territory, stock market indices have moved into something of a holding pattern. In the year to date, the Dow Jones is up by 2.5%, the S&P 500 10% and the Nasdaq 32%. For the latter, the previous theme of big tech being seen as the beneficiaries of sustained lockdown has emerged once more.

The UK, of course, is suffering from similar problems, and the upcoming Spending Review is likely to see “an economic shock laid bare” as the country grapples with its own stimulus issues. In addition, as Brexit negotiations become more fraught and indeed pressing, international investors continue to give the UK a wide berth.

There is an increasing chorus that the UK could garner some popularity as an investment destination after the dust has settled. However, this remains a story for tomorrow and, with the FTSE 100 still down by 15% in the year to date, the fact that the outlook is precarious is unlikely to change sentiment towards the index any time soon.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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