Market Update

It's been an emotionally charged week, with front-page news dominated by worsening infection rates, hospitalizations, and fatalities. Simultaneously, there was a surge of optimism in global equity markets due to positive developments in Pfizer's coronavirus vaccine.
This market enthusiasm might appear puzzling considering the vaccine's ongoing development, approval processes, and the time it will take for production and distribution. Consequently, infections and death tolls are expected to rise in the coming months, given that the coronavirus will continue to impact us well into the next year. However, the medium-term outlook remains remarkably promising. A coronavirus vaccine will not only restore a semblance of normalcy to our lives but, more crucially, will enable economies to fully reopen, accelerating the economic recovery.
Equity markets, as history shows, do not progress linearly. Expect a few more hurdles along the way, as the tug-of-war between alarming virus statistics, short-term negative economic impacts from localized lockdowns, positive vaccine announcements, and the ongoing economic recovery is likely to keep market volatility high. Yet, in the grand scheme, equity markets will inevitably focus on the economic recovery the vaccine promises. For long-term investors, it's essential to remain composed amid these short-term fluctuations and market noise, as Benjamin Graham famously pointed out: in the short term, markets are driven by emotions, but in the long term, fundamentals prevail.
This week's economic data revealed that the UK economy expanded by a record 15.5% during the third quarter of this year. Although this growth comes after a substantial 19.8% contraction in Q2, the final quarter of the year might present challenges due to the current lockdown restrictions. Nonetheless, our expectations for positive growth in 2021 remain steadfast.
In the US, the weekly jobless claims data continued to decline, with continuing claims, reflecting the total number of Americans claiming unemployment benefits, dropping to 6.8 million from the peak of 24.9 million in May.
Looking ahead to the upcoming week, we anticipate US retail sales and industrial production data, along with the Empire State Manufacturing Survey and the weekly US jobless claims data. Additionally, there are UK CPI inflation and retail sales reports, Chinese industrial production and retail sales figures, and Japanese Q3 GDP data on the horizon.