I was going to call this week’s musings “what a difference a day makes” but I was clearly being a bit optimistic. However, we or should I say they, have a result although by no means the clear repudiation of Mr Trump that had been forecast.
The interesting thing about the result- a pretty much divided US government- is that world markets love. Here at home the FTSE100 had its best week since June, despite the issues with Brexit. This was largely due to the result of the American election.
You will recall that I did forecast the three USA markets would have a field day if the result turned out as I anticipated. The sentiment behind this is that while Biden might well be minded to increase taxes on American Companies he will be restrained because he has not gained control of the Congress and the Senate. The lack of clear control could well lead to a reduction in rates by the FED together with further quantitative easing. Both will of course stimulate the economy.
In mainland Europe the CAC40 and the DAX had superb weeks in spite of the very sad terrorist attacks, both gaining nearly 8%.
As I have said before I think we are still looking at a period of volatility, but I now think that it will be volatility around an upward line. Although I would never downplay the impact of Covid 19, many of the political headwinds that we faced are lessening.
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If you have any questions on these weeks musing or indeed any other topic, please get in touch. Although the office is to all intents and purposes closed for the rest of the month the phone will be answered. If you want to reach me directly 07435961990 or email@example.com
So, to the markets