Please find the latest edition of Weekly Digest attached, which discusses today’s announcement that the Pfizer/BionTech mRNA vaccine has been found to be 90% effective. This follows up my earlier email and, at the time of writing, the S&P 500 is up 3.2% and the FTSE 100 has closed up 4.7%.
Global equity markets rose 6% in sterling terms last week, as election counting continued and Joe Biden edged closer to official victory in the wake of a blizzard of lawsuits from Donald Trump and a refusal to concede. Economic data was lost in the noise, with a positive US employment report showing that 638,000 jobs were added in October, driving the unemployment rate down to 6.9% from 7.7% (lower than the 7.5% forecasted). In the UK, the Bank of England added an extra £150 billion of Quantitative Easing and the UK Government announced an extension of the furlough scheme to March 2021.
On the matter of the US Senate, the positon is that the Democrats and Republicans are tied at 48 seats each – with 51 needed for a majority. Races in North Carolina, Alaska and one Georgia seat remained uncalled (all of which are Republican seats). Both Georgia seats are headed toward a 5th January runoff, while Alaska and North Carolina are almost certain to remain Republican. If the Democrats do win both Georgia senate seats, the senate will be tied 50/50. The Vice President then has the casting vote, so Democratic control of congress would result. Currently the most likely outcome looks to be 51/49. In the House, 218 seats are needed to win. Associated Press has the Democrats now on 215 (-4), Republicans on 196 (+5), with 25 seats still to be called. The Democrats are expected to win with a decreased majority. Joe Biden has already stated that he will rejoin the Paris Climate Change Accord and the World Health Organisation following his inauguration.
COVID infections continue to rise across the globe, but mortality rates are still relatively well behaved (just now reaching the highest levels of April). The main reason behind the widespread European tightening of restrictions is increased hospital admissions, which are running at around half of the April peak in Europe, but have been rising fast since October.
The recovery in global activity continues to show signs of stagnation with activity, with the US and UK falling behind the median for developed markets. France has fallen below both countries following its new lockdown. Even so, September saw global container traffic reach a record high, up 2.7% year-on-year. September’s increase was driven by increases across the globe, suggesting that some aspects of global trade have already recovered:
Looking to the week ahead, Tuesday sees the release of Chinese inflation data and the latest employment report from the UK. On Thursday, we have preliminary Q3 GDP for the UK and inflation data for the US and Europe.