What Investors can be Thankful for this Thanksgiving

While not celebrated here in the UK, Thanksgiving rivals Christmas as one of the most important days in the calendar for our allies across the pond. Despite markets remaining closed on Thanksgiving Day itself, investors have much to be thankful for this year, despite a wretched start.

The Coronavirus pandemic ravaged global markets during late February and much of March, sending equities downwards in rapid fashion as global lockdowns effected consumer spending and many businesses’ ability to trade. This was, however, followed by a rip-roaring rally in the US that, in the space of five months, managed to rise above and beyond it’s all time highs led by technology and work from home stocks.

New highs were even reached by the more cyclical sectors such as financials and industrials that had previously remained relatively depressed during the market recovery but have now risen on the back of positive vaccine data from three separate companies, two of which showed over 90% effectiveness. This helped the industrials-heavy Dow Jones Index reach the coveted 30,000-point milestone in late November as value stocks enjoyed significant gains after months of heartache.

An important and significant test for many businesses, however, will likely come during the Black Friday and Cyber Monday events which will give investors a strong insight into the state of consumer spending at present as well as the performance of bricks and mortar retailers who will be surely looking forward to such events after multiple lockdowns and a lower propensity for customers to travel, significantly hurting the already ailing sector.

Perhaps even more important for markets in general, is the President elect’s first 100 days in office and whether or not the house and senate can agree on a further stimulus package. With the Republicans retaining control of the Senate and the Democrats remaining leaders of the House after the election, many in the investor community are expecting little in the way of significant, left-leaning policies that many were concerned Biden would implement. This will, in theory, help to maintain somewhat of a status quo, with a stimulus bill, if agreed on, providing some much-needed certainty during uncertain times.

Please note that investments and income arising from them can fall as well as rise in value and you may lose some or all the amount you have invested. Past performance and forecasts are not reliable indicators of future results or performance. Please note that this communication is for information only.