Well, if there was a weather condition which defined my mood right now, it would have to be foggy, as I really am unsure in which direction things will lead next!
Starting with the US Presidential election however, things are slowly reaching a conclusion in the title race, although I think they may need a ‘his and his’ bathroom in the White House, as the current incumbent seems set on staying put whatever!
Moving on to the US sharemarkets firstly, you may have noticed that in spite of the turmoil surrounding the election, shares have largely moved forward at a pace in the last couple of days, so why is this? The reason for this is due to the fact that, far from the expected landslide victory expected for Biden, the US looks like having an almost 50:50 outcome, which will mean that there may be a fairly even mix of Democrats and Republicans influencing US policy in the Congress going forward; whilst Biden wanted to increase business corporation tax from 21% to 28% and to water down the level of any economic stimulus package, he is likely to find too much opposition to this, which will be good for business and hence the sharemarkets move up (for now!). At pitch level though, a divided nation is never a good thing.
What this all means to the UK is that we may find ourselves rather more out in the cold under a Biden leadership, as he is very much in favour of our membership of the EU; however politics is one thing, essential trade and business opportunities are another, so we will have to wait and see.
So where are we with things at home? Well, in line with the US, our sharemarkets have also enjoyed a few days of decent growth/recovery and with the clarification as to the extension of the Furlough scheme to the end of March 2021 and a new programme of Quantitative Easing by the Bank of England (a process whereby the Central Bank purchases securities from the Treasury, local authorities and certain institutions, with a view to allowing this money to be circulated within the wider economy), there is an acknowledgement that the government are taking robust measures to alleviate the financial impact of a further lockdown.
There is no hiding from the fact that, as a nation and like so many other countries, we are borrowing our way out of this problem, but needs must and I’m sure that we will address the solution to this further down the line when, hopefully, a degree of normality has returned.
In terms of the wider investment situation then, UK shares have made some progress this week, but have a long way to go to get back to previous levels. For other asset sectors, these continue to progress in the main part and for many of you, as more cautious investors, this is reflecting within your investment valuations, but if you feel that it would be helpful to have a discussion about your situation, then please contact me as I am very much open for business for all of my Clients.