Market Outlook: Vaccine hopes are boosting equities
We have recently seen an increase in risk appetite and a clear rotation towards lower-valued companies, as well as stronger economic conditions and somewhat higher government bond yields. The rotation from high-priced technology stocks to value stocks continued early this week after encouraging COVID-19 vaccine news and hopes of a faster economic recovery.
Market Outlook: Market gains strength after Biden's victory and vaccine progress
Democratic candidate Joe Biden won Pennsylvania, which finally appears to have decided the outcome of the US presidential election. Now there are clear hopes that American foreign and trade policies will be more predictable, which means trade negotiations with China will be pursued in a more even-tempered tone and that the risk of an imminent trade war between the US and the European Union will effectively disappear.
Market Outlook: Sentiment is still weighed down by COVID-19 and US election uncertainty
So far, most third quarter corporate reports have been impressive. In the United States, 86% of companies in the S&P 500 index have beaten expectations. This is the highest figure in 26 years. But stock markets have not reacted so much to these positive figures. Instead, uncertainty about COVID-19, the US election, Brexit and the economic outlook are clouding investors' view of the future. Despite a rise in coronavirus cases for several weeks, the trigger that led to lower share prices was that US infection figures surpassed their July peak. Continued deadlock in negotiations between Democrats and Republicans on new federal stimulus measures also pushed down stock market sentiment.