Weekly comment: Bright Start
Weekly podcast: Markets Uncut
As markets endured the first full week of 2021, Investment Manager Sean Raftery is joined by Richard Carter, Head of Fixed Interest, and Matt Ennion, Fund Research Analyst, to discuss the market’s reaction to last week’s US political events, the likelihood of a UK budget and what sectors have started the year on the right foot.
Market overview – Alan McIntosh, Chief Investment Strategist
Global equity markets had a significantly positive start to 2021, including the US which stole the headlines given the Democrats’ win of the two available Senate seats and the dramatic events that followed. The Democrat’s victory sparked a controversial protest by Republican supporters who stormed the Capitol. Despite the clash, markets remained relatively unphased and more positively concerned by the Senate result as US equities climbed roughly 1.5% for the week. Given the backing by the Senate, President-Elect Joe Biden will have a better chance in implementing his sustainable agenda as well as rolling out a larger stimulus package which is still yet to be detailed.
Elsewhere, the UK restored its losses from the week prior as the FTSE 100 climbed over 6%. This reflects the general optimism for the market amid the furlough scheme extension until April and the roll out of more than 2.4 million vaccine jabs despite the nation going into its third lockdown just before the New Year.
Looking more sector-focused, the energy sector responded positively to higher oil prices as Saudi Arabia agreed to reduce production, while miners and financials rose reflecting optimism about global economic recovery later in the year. This goes hand in hand with gold’s fall in value, as attention shifts away from safe havens and more towards equities.