Monthly Market Review – November 2020
VIEW PDFHow the different asset classes have fared: (As at 30 November 2020)
1 Bloomberg AusBond Bank 0+Y TR AUD, 2 Bloomberg AusBond Composite 0+Y TR AUD, 3 Bloomberg Barclays Global Aggregate TR Hdg AUD, 4 S&P/ASX All Ordinaries TR, 5 Vanguard International Shares Index, 6 Vanguard Intl Shares Index Hdg AUD TR, 7 Vanguard Emerging Markets Shares Index, 8 FTSE Developed Core Infrastructure 50/50 NR AUD, 9 S&P/ASX 300 AREIT TR, 10 FTSE EPRA/NAREIT Global REITs NR AUD
Markets rebounded strongly over November due to a number of factors including RBA cutting interest rates to a record low of 0.10%, in addition, to its announcement of $100bn quantitative easing program, Joe Biden being declared the winner of the US presidential election and positive news regarding COVID-19 vaccines (Pfizer and Moderna).
On 3rd November, the RBA cut the official cash rate from 0.25% to a record low of 0.10%. In addition, it announced a $100 billion quantitative easing program. These actions show the RBA’s unprecedented stance to provide support to the Australian economic recovery and bode well for the domestic economy. The ASX saw a sharp rally following the announcement.
After several days of uncertainty, as the US counted postal votes, Joe Biden was announced as the winner of the US presidential election. The results are usually clear on the night of the election, however, as millions of Americans casted their votes via post due to COVID, there was a delay in the announcement of the winner. This delay created skepticism amongst Trump supporters, paving the way for Trump to declare voter fraud and demanding recounts. Ultimately after some recounts, Joe Biden was declared the winner.
Following the announcement of Joe Biden as the winner of the US presidential election, Pfizer revealed its vaccine results from Phase 3 testing which showed a 90% effectiveness. Not long after, Moderna announced its vaccine results from Phase 3 testing which showed a 94.5% effectiveness. Both announcements are extremely positive results in steps towards normalisation. Markets reacted positively to the news but interestingly during the early days of the announcement markets saw a rotation out of growth stocks towards value stocks. Value continued to outperform growth up until the end of the month.
One major downside over the month was the continued rise of COVID-19 infections, particularly in Europe and the US. With the northern hemisphere heading into winter and the easing of restrictions in August and September, Europe and the US entered a second wave. Most European countries implemented new lockdown measures and some states in the US have started to tighten restrictions. Deaths have remained well below their prior peaks as treatment methods are better. However, the new infection rates are starting to put pressure on the medical system as hospitalisation rates increase. The continued rise in infections will continue to put pressure on any economic recovery for these economies until a vaccine can be rolled out.
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The information contained in this material is current as at date of publication unless otherwise specified and is provided by ClearView Financial Advice Pty Ltd ABN 89 133 593 012, AFS Licence No. 331367 (ClearView) and Matrix Planning Solutions Limited ABN 45 087 470 200, AFS Licence No. 238 256 (Matrix). Any advice contained in this material is general advice only and has been prepared without taking account of any person’s objectives, financial situation or needs. Before acting on any such information, a person should consider its appropriateness, having regard to their objectives, financial situation and needs. In preparing this material, ClearView and Matrix have relied on publicly available information and sources believed to be reliable. Except as otherwise stated, the information has not been independently verified by ClearView or Matrix. While due care and attention has been exercised in the preparation of the material, ClearView and Matrix give no representation, warranty (express or implied) as to the accuracy, completeness or reliability of the information. The information in this document is also not intended to be a complete statement or summary of the industry, markets, securities or developments referred to in the material. Any opinions expressed in this material, including as to future matters, may be subject to change. Opinions as to future matters are predictive in nature and may be affected by inaccurate assumptions or by known or unknown risks and uncertainties and may differ materially from results ultimately achieved. Past performance is not an indicator of future performance.
