Weekly Market Insight

Latest Economic & Market Update 16th November 2020

16th November 2020

Good afternoon, it is November 16th 2020 and here is your economic and market update from BlackBee. 

Today’s focus:

» Crunch time in Brexit Negotiations.
» Central Bankers discuss the impact of Covid-19 Vaccine.

On Sunday, Simon Coveney, Ireland’s Minister for Foreign Affairs warned Boris Johnson that the main outstanding issues regarding Brexit talks will need to be “resolved in principle this week”. British officials also admitted that negotiations had reached a point where an agreement needs to be reached. The EU are of the same view where one diplomat stated “It is crunch time” and that “We will see whether number 10 can put an end to its internal chaos, make up its mind and come up with a sensible approach”. Simon Coveney also warned that EU approval on a trade deal will be dependent on if Mr Johnson drops his threat to break commitments on Northern Ireland in his withdrawal treaty. Following the election of Joe Biden as US President it is important for Britain to avoid a deal that could destabilise the peace process in Northern Ireland. Negotiations held last week were considered to have seen some progress but Mr Johnson’s chief Brexit negotiator David Frost stated that despite progress made, there was still substantial differences remaining and a no deal Brexit was still possible. Britain’s transition period ends on the 1st January and considering the European Parliament need to ratify any agreement made, both sides have acknowledged that crucial compromises will have to be made in the coming days. (Source: Financial Times).

US biotech Moderna announced today that its coronavirus vaccine has shown a 94.5% efficiency rate in clinical trials. Following the breakthrough of a potential coronavirus vaccine from Pfizer and BioNTech, some of the Worlds’ top Central Bankers gave their view on the breakthrough of a potential coronavirus vaccine at the ECB’s annual forum on central banking last week. The chair of the US Federal Reserve Jerome Powell commented that it is “certainly good news and welcome news for the medium term”, however regarding the timing, production and distribution he warned that “significant challenges and uncertainties remain”. From the US Federals Reserve’s view, he stated that it is too soon to assess with any confidence the implications for the path of the economy and added that the next few months could be challenging. Christine Lagarde, the President of the ECB, also reiterated the theme of reducing uncertainty including references to Joe Biden being elected President of the US. Andrew Bailey, the governor of the Bank of England also showed cautious optimism, though he made reference to the fact that the vaccine is not being implemented yet. He did note that the development of a vaccine falls in line with BoE expectations for a healthier economy next year. In terms of what the future would look like, Mr Powell gave insights stating the economy would be fundamentally transformed to be more reliant on technology and automation. (Source: Financial Times)

Best & Worst Performers of Large Cap US Stocks on Friday
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Global Market Update
(as at close of markets 13/11/2020)