Equities rose strongly over the month as investors digested a slew of positive vaccine data. The three groups closest to having a vaccine approved all announced encouraging results. Although the clinical trial data for each drug varied, they all appear to be highly efficacious in preventing symptoms as well as reducing the number of severe cases. This should significantly diminish Covid’s impact on healthcare systems and likely herald a return to normality by the summer of 2021. In response those companies that have been most impacted by the pandemic saw their share prices rebound strongly. Challenges remain but we believe the outlook for equities is now as positive as it has been for a considerable time.
Away from the pandemic the Brexit negotiations inched inexorably towards a conclusion. At the time of writing the outcome remains uncertain. On balance we believe there will be some form of deal. The substance of it, however, is unlikely to be vastly different from what we might have termed ‘no deal’ at the outset of the process. Nonetheless, should a deal be forthcoming we would expect UK assets to rally as a major source of uncertainty is removed.
It is an unusual time when the outcome of the US Presidential election is relegated to the third paragraph of a fund manager’s monthly. After a string of upsets pollsters finally regained some credibility as the long-time frontrunner, Joe Biden, won the US election – even if The Donald has yet to recognise it. The Democrats, however, failed to win a majority in the Senate. Technically, it is still possible as Georgia’s two senate seats will be decided in a run-off but the republicans should retain at least one. A Democratic President and a Republican controlled Senate is a reasonable outcome for investors and markets responded accordingly.