Happy New Year and welcome to 2021!
Please see below for our first blog post of the year, a Monday Market Update from Blackfinch.
Please note, this is a 2 week update for the two-week period 21st December 2020 – 1st January 2021):
The ever-changing world we live in reinforces the importance of regular up-to-date communication. This weekly news update from our multi-asset portfolio managers provides you with a summary of global events for your reference and to share with clients.
- On Christmas Eve, and with just days to spare, the UK Government and the European Union (EU) put pen to paper on a post-Brexit trade agreement, with UK politicians voting overwhelmingly to back the deal.
- The UK government confirmed that a new strain of COVID-19 was sweeping across the nation. Travel bans were imposed by a significant proportion of Europe, including cross-channel trade with France. Many travel restrictions were eased within days, although the backlog continued over the festive period.
- A post-Christmas review of lockdown tiers resulted in a further 20 million people placed into stricter Tier 4 restrictions.
- The UK government was set to mobilise large-scale vaccination programmes, choosing to focus on ensuring a larger proportion of the public receive their first jab than was planned under the initial roll-out.
- Third quarter Gross Domestic Product (GDP) bounced back stronger than previously reported, rising 16.0% quarter-on-quarter, following a record contraction of 18.8% in the second quarter.
- Official figures showed the UK government borrowed £31.6bn in November.
- Congress approved a $900 bn stimulus package in the days after Christmas, despite a last-minute hold up prompted by President Trump over payment amounts to individuals.
- The US economy grew at a record pace in the third quarter, and quarter-on-quarter GDP was revised slightly higher, from the initial reading of 33.1% to 33.4%.
- Jobless data for the week to the 19th December showed 803,000 new unemployment claims, down from 892,000 in the previous week.
- Vaccine producers are confident their existing vaccines will provide similar levels of immunity against the new strain of COVID-19, although no official test results have confirmed this.
- The UK approved the use of the AstraZeneca and Oxford University vaccine after it passed the necessary regulatory hurdles. The UK has ordered 100 million doses of the vaccine, which is easier to store than the already approved Pfizer/BioNTech version.
- Many EU countries began their roll-out of the Pfizer/BioNTech vaccine.
Whilst the beginning of this year may not be as happy as usual, we can now finally see light at the end of the tunnel. Yes, the next few months are still going to be difficult with potential lockdowns and heavier restrictions, but with the vaccine roll out which has now begun, life will soon return to normal.
Of course, with this will come market volatility, however they will recover, the FTSE 100 for example is today at its highest point since early March 2020 (this is great news!).
The restrictions and lockdowns are not ideal, but it’s part of a necessary plan to control this virus once and for all, plus, lockdowns are easier to deal with now than they were last year, as this time we know what to expect compared to the end of March last year, when it was all brand new unchartered territory for us, people and businesses (see what I did there?) know how to adapt better now.
Soon the US will inaugurate Present Elect, Joe Biden, into the White House, the mass vaccine roll out is now underway, whilst the next months will still be bumpy, we now have plenty to look forward too!
Thank you to all those who read our blogs last year, and this will be the first of many to come this year. We are not slowing down and we will continue to provide you with market updates from a range of experts and fund managers, plus plenty of our own original blogs and insights into the markets and this new world we are now living in.
Again, a very Happy New Year to all our readers, and I’m sure we are all together in the view that this year will be better than the last!