It was a November for investors to remember as a widespread focus on the perceived safe havens of gold and government bonds was replaced by renewed interest in equities. Many major equity markets notched up double-digit gains over the month, buoyed by significant breakthroughs in the development of coronavirus vaccines.
- Joe Biden won the US Presidential election
- England was set to move from lockdown to a regional “tiered” system
- 15 Asian nations signed a major trade deal
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It was a November for investors to remember as a widespread focus on the perceived safe havens of gold and government bonds was replaced by renewed interest in equities. Many major equity markets notched up double-digit gains over the month, buoyed by significant breakthroughs in the development of coronavirus vaccines. Positive results from a vaccine developed by Pfizer and BioNTech were followed by Moderna’s vaccine, and then by a vaccine developed by the University of Oxford and AstraZeneca.
“UK economic output is not expected to return to pre-pandemic levels until the end of 2022”
Investors were heartened by Joe Biden’s eventual victory in a bad-tempered and tumultuous US Presidential election. Uncertainty surrounding the transition from a Trump to a Biden presidency dissipated as the month went on; whilst repeating his allegations of fraud, President Trump confirmed that he would co-operate with the incoming administration. Sentiment was further buoyed by the news that President-elect Biden had nominated former Federal Reserve (Fed) Chair Janet Yellen as his Treasury Secretary. The Dow Jones Industrial Average Index breached 30,000 points for the first time ever during November and rose by 11.8% over the month.
As the national lockdown drew to an end in England, the UK Government announced that the country would move to a regional “tiered” system, raising concerns over the impact on the hospitality and leisure industries. Nevertheless, news of significant progress in the development of a Covid-19 vaccine provided a welcome boost for sentiment, and the FTSE 100 Index rose by 12.4% over the month. Elsewhere, the Chancellor of the Exchequer warned that UK economic output is not expected to return to pre-pandemic levels until the end of 2022.
President of the European Central Bank (ECB) President Christine Lagarde warned that the pandemic has created “a highly unusual recession and is likely to give rise to a similarly unsteady recovery”. Although she welcomed the “encouraging” news about vaccines, she believes the recovery was likely to be “rather unsteady, stop-start and contingent on the pace of vaccine roll-out”. Nevertheless, over November as a whole, the Dax Index rose by 14.9%, while the CAC 40 Index soared by 20.1%.
During the month, the leaders of 15 Asian nations – including Japan, China, South Korea, Australia, New Zealand, and the ten ASEAN countries – signed the Regional Comprehensive Economic Partnership (RCEP), a trade deal that will encompass almost one-third of the world’s population and about 30% global GDP.
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