25 November 2020

What will normal look like?

With yet more vaccines coming on stream, markets have continued to be buoyed by the belief that some form of normality will return by spring next year.


With yet more vaccines coming on stream, markets have continued to be buoyed by the belief that some form of normality will return by spring next year. The Dow Jones Industrial Average broke through 30,000 for the first time, not that much progress has been made this side of the pond since Pfizer became the first to announce a positive result in the search for the means to combat Covid. Still, at least we have held onto the gains we made over the past two weeks.

The Chancellor’s autumn spending review was widely reported in advance and, as expected, did not deliver much in the way of cheer for investors. The sobering realisation that all the measures put in place to protect jobs and the economy will need to be paid for over many years to come, along with the restrictions announced to carry us to Christmas after the national lock down ends, will affect sentiment as we move into December. But no doubt investors will continue to cling to the belief that the introduction of a series of vaccines will allow things to return to normal – whatever that might mean.

None of this is the type of stuff to get investors excited. But there is little of note on the corporate front, while such economic news as is emerging is also failing to set the world on fire. And this is a short week for American markets, with the Thanksgiving holiday followed by “Black Friday” when our transatlantic cousins are expected to commence their Christmas shopping spree. While we do not have the imperative of a long weekend to encourage people to switch on their computers and shop on-line, the fact is that Black Friday has become a marketing ploy all around the world.

At least there is now some movement on the Presidential handover from the White House. Not that Donald Trump has yet conceded defeat or congratulated his soon to be successor. Perhaps the incoming President will make a better job of tackling the pandemic. This remains an abiding influence on shares, though rather on the positive side at present. This should not obscure the situation in America, which has had a near disastrous Covid experience. As the world’s largest economy, we need Mr Biden to get it right if normal is to return.

Meanwhile, the NHS has announced that it expects to complete its vaccination programme by 30th April next year. It is news like this that encourages investors to remain committed to the riskier end of the investment spectrum, along with the fact that returns elsewhere are pretty paltry at present. Make no mistake, though, normal – when it arrives – may be closer to what we are used to than our experience of the last nine months, but there will be some significant changes. Some will doubtless be for the better, but life will never be quite the same again.

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