US stocks rose around 4% (S&P 500), as did Japanese, the UK and European markets were all up but by more modest amounts.
Despite a determined second/third wave of COVID-19, international stock markets have followed through in the ebullient mood established in early November in the wake of the successful vaccine results and election of Joe Biden.
The leadership in US stocks changed again with the NASDAQ back in pole position (up by around 7%). Within the NASDAQ there was also a noticeable shift as big tech trod water while other sectors picked-up. Alexion Pharmaceuticals leapt 30% after a bid from the UK’s AstraZeneca while Tesla continued its extraordinary run (up a further 28% over this period) prior to joining the S&P 500 Index on 21 December, an event that is likely to lead to colossal volumes in the US markets.
The US dollar resumed its slide, falling against most of the major currencies while sterling was buffeted by the ongoing Brexit saga (please can it end before 2021?). We hold to our oft-stated view that there will be a final, absolutely last-minute, fudge, to be followed by several days of media panic as governments across Europe attempt to ratify the fudge before 31st December. But, who knows, a final collapse of the ‘talks’ remains a distinct possibility.
US interest rates at ten and thirty years continue to edge up with the more buoyant mood, Federal Reserve Governor Powell, who has done such a good job this year (despite carping and interference from President Trump), is due to speak this evening. UK ten-year rates have slipped down again, worrying about Brexit and its potential impact on growth along with more restrictive COVID-19 tiers, notably in London. European rates are little changed at the (very) low levels. The tone in credit markets remains strong.
Oil had a strong month, catching-up with some of the other commodities and regaining $50 per barrel (Brent). The price of gold drifted down again, but did find support below the $1800 per oz. level.
The US Supreme Court failed to come to President Trump’s rescue and the Electoral College finally confirmed Joe Biden’s victory, now we can all turn our attention to Georgia and those two Senate seats. Expectations are that the GOP (Republicans) will retain at least one of them and with it their control of the Senate.