Market Outlook Report – December 2020

Market Overview

The World Begins to see Successful Vaccine Developments

Developments around Coronavirus vaccines have understandably dominated the news since the announcement of the Pfizer vaccine’s 90% effectiveness, with Moderna and Oxford following closely behind. With infection rates rising again across Europe and economies suffering from lockdown restrictions, markets have been buoyed by the hopes of an effective vaccine being rolled out in 2021.

Relevance/ Impact 

UK Economy Will Contract Close to 11 Per Cent in 2020

Rishi Sunak’s spending review is set to contain the largest downgrade in economic performance and the public finances since the second world war, with the Bank of England forecasts predicting the UK economy will contract close to 11 per cent in 2020, the worst annual performance for more than 300 years.

Relevance/ Impact 

US Election 2020: Biden Claims Victory

After crossing the 270-seat threshold Joe Biden is set to become the 46th president of the US in what is being tipped as one of the most important elections in recent history. Donald Trump is still however targeting postal votes and vote certification in a late bid to block Biden.

Relevance/ Impact 

Dollar Expected to Slump

There is an expectation among currency analysts that an approval of one of the Coronavirus vaccines could cause the dollar to sink as the global economy rebounds and confidence returns.

Relevance/Impact

Gold Prices Slump as Vaccine Optimism Surges

Gold has posted an impressive two-year bull market rally that saw the price reach record high in the August of this year. However, the recent positive influx of news surrounding the possible successful vaccine for Covid-19 is threatening to end this bull market and is causing the Gold Price to falter.

Relevance/ Impact 


Disclaimer: This document represents the opinion of Reeves Independent only and is not intended as advice and no investment decisions should be made solely on the back of this email. Always seek independent financial advice before taking any action. Past performance is not a guide to future performance. All investments carry the risk that you will get back less than you put in.

Sources:

FT (18th November) - Sunak faces worst hit to UK finances since second world war https://www.ft.com/content/2883c55f-e4e1-40c2-9075-62c96dd6ecd8

Guardian (9th November) - Global stock markets surge after Pfizer Covid vaccine news https://www.theguardian.com/business/2020/nov/09/stock-markets-covid-vaccine-ftse-100-coronavirus

Reuters (18th November)- Airlines scramble to prepare for ultra-cold COVID-19 vaccine distribution https://uk.reuters.com/article/us-health-coronavirus-airlines-freight-a/airlines-scramble-to-prepare-for-ultra-cold-covid-19-vaccine-distribution-idUSKBN27Y0NN

Guardian (16th November) - Here are the major hurdles ahead for Covid-19 vaccine distribution in the US https://www.theguardian.com/world/2020/nov/16/us-coronavirus-vaccine-distribution-challenges

FT (19th November) - Boris Johnson promises biggest UK defence investment for 30 years https://www.ft.com/content/684a9881-c964-478b-b87b-84aa697810f2

FT (19th November) - Biden’s win changes the mood music for markets https://www.ft.com/content/e9027cd0-f6b7-491e-84d8-656c6e8a0aed

JPMorgan (12th November) - How Are Markets Reacting to the U.S. Election? https://www.jpmorgan.com/insights/research/market-reaction-2020-election

BBC News (18th November) - Talk of Brexit deal breakthrough: Handle with care https://www.bbc.co.uk/news/world-europe-54985625

FT (19th November) - Vaccine arrival expected to trigger dollar slump in 2021 https://www.ft.com/content/d2a226b8-574a-4d1c-9205-fa076ed97055

FT (19th November) - Surge in vaccine optimism slams brakes on gold
https://www.ft.com/content/a1f0a75c-b3d7-4550-88ef-ea8cad18d0f3