Vaccine rally and new records

For the month as a whole, the US S&P 500 Index rose by 10.9 per cent measured in USD, while the European Stoxx 600 Index climbed 13.9 per cent measured in EUR and the Nordic VINX Index ended up 5.6 per cent measured in NOK. Here in Norway, the Oslo Stock Exchange (OSEBX) rose by all of 14.6 per cent.

Light at the end of the tunnel

The vaccine news many people were waiting for was announced in November. The market was nevertheless amazed that the data showed the vaccines produced by Pfizer, Moderna and AstraZeneca were more than 90 per cent effective. It is now hoped that the virus restrictions can be gradually reduced next year, as this will clearly be positive for growth in the global economy. This year's losers, such as energy, financial and travel shares, were therefore the winning sectors in November.

Fresh outbreaks

In the short term, however, fresh outbreaks of the virus are expected. As a result of the partial lockdown in several European countries, estimated fourth-quarter GDP growth in the eurozone has been reduced from 9 per cent to minus 8 per cent. Nonetheless, US growth expectations have remained stable despite the increase in infection there too. The difference is that they have not re-introduced the lockdowns we have seen in Europe.

Fight for the Senate

In addition to vaccines, the US presidential election stole the headlines in November. Although President Donald Trump is still trying to sow doubt about the election result, most people acknowledge that the next US president will be Joe Biden. The Senate majority is still not clear, but will be decided in a re-election in Georgia in January. Betting companies estimate a more than 70 per cent likelihood of the Republicans keeping the Senate, which will mean "status quo" in fiscal policy. Should the Democrats nevertheless win the re-election, this will probably lead to a more expansionary fiscal policy that may potentially lead to higher interest rates and fears of higher taxes once again.

The road ahead …

The prospect of vaccines and reopened economies next year is beneficial for shares. Although it continues to be uncertain how the virus will develop, there is still a lot of money on the sidelines. So shares still appear to be a good investment alternative.

"An important key to investing is to remember that stocks are not lottery tickets"
Peter Lynch