Down to wire
- The Pfizer/BioNTech vaccine began its rollout this week to vulnerable over-80’s and health & care staff cohorts. This week marked the first distribution of over 800,000 doses expected to be delivered in the coming weeks and the four million expected by the end of the month.
- Boris Johnson and Ursula von der Leyen agreed to a Sunday 13 December deadline for a decision on a Brexit deal. Despite nine months of troubled talks, “very large gaps” are said to remain between the UK and EU. The leaders said they should come to a deal or no deal outcome by the end of the weekend, with pressure on both sides to find time for parliamentary ratification.
- October was the sixth consecutive month of growth for the UK after the economy contracted by a record 19.5% in April amid the first lockdown. The economy also remains fragile, with unemployment continuing to rise. The ONS said there had been some areas of growth during October but the UK economy “still remains around 8% below its pre-pandemic peak”.
Once again another week closes with a sea of green in the week-to-date equity numbers. It’s been a particularly exciting week for UK investors. Against a backdrop of Brexit noise, the UK market has closed the week slightly up as the vaccine rollout begins to gain traction.
The start of the Pfizer vaccination distribution began in the UK this week, marking an encouraging milestone as the UK becomes the first Western nation to begin the process. As the number of vaccinated individuals increases and the fuel for the virus diminishes, the light at the end of the tunnel shines ever brighter. While nations approach herd immunity, more positive news flow is likely to flood through markets over coming months as governments relax social distancing restrictions and businesses can return to normality.
Also in the UK this week, Prime Minister Boris Johnson has warned Britain to prepare for a no-deal Brexit. Were this to materialise, the UK and EU would automatically fall back on the rules of the World Trade Organization (WTO). Consensus amongst analysts remains that some form of trade deal can be reached before the Sunday deadline. As ever, markets dislike uncertainty and the resolution of these talks is likely to quell much of the discomfort in markets.
We remain confident that our UK holdings are well positioned to weather any Brexit-induced storms and we will look for opportunities to top up in these businesses over coming days as investors impartially shy away from UK names.
Quote of the Week
A man with a rather unfortunate name has won a local election in Namibia. Uunona Adolf Hitler, was elected as a local politician for the town of Ompundja, in the north of the country, with 85% of the vote. As a former German colony, you might expect to find a few German street names and the occasional dry pilsner. Names will also have been left behind… Hans, Tobias, Friedrich, but Adolf?! Mr Hitler claims his father did not know who his namesake was or what he stood for, but promises to do what he can to redeem the name, even if only in his local community.