The differing fortunes of economies depending on vaccination rollout progress is becoming more pronounced.
How has the vaccination rollout affected different countries economies?
Europe is becoming something of a laggard with the need for some further targeted lockdowns, while in the US and the UK the rollout programmes continue apace.
For the US, a better than expected jobless claims number adds to the likelihood that the economic recovery is becoming slowly established. With the stars aligning as the vaccine accelerates, and with monetary and fiscal stimulus likely to provide a turbocharge, the rotation towards conventional cyclical sectors continues, largely to the detriment of the previously firing big tech sector.
In the year to date, the more traditional Dow Jones index has risen by 6.6% and the S&P 500 by 4.1%, while the Nasdaq’s gains are currently capped at 0.7%.
In the UK, retail sales were better than expected, if some distance off the levels of a year ago. Nonetheless, if the figure represents some unlocking of pent-up demand as restrictions slowly begin to ease leading into Summer, further progress can be expected.
There were also some promising signs that M&A activity continues to be a feature of recovering prospects as Aviva announced the sale of its Polish unit to Allianz for €2.4 billion, while Kaz Minerals was the subject of an upgraded and likely final bid from consortium Nova Resources for £4.1 billion.
Less positively, strained relationships with China took another turn following accusations of human rights abuses in Xinjiang. The likes of Nike became the subject of a social media backlash in China, with its shares dropping by 3% as a result. Meanwhile, Burberry also felt the wrath of Chinese social media, with its brand ambassador stepping down and its branding dropped from a popular video game in the absence of the company stating a position. Despite the clear ramifications this could have for its burgeoning Chinese market, Burberry shares edged ahead in early trade.
Overall, the FTSE100 remains 4% ahead for the year as the end of the first quarter approaches, having been the subject of some international interest following a period in the doldrums.
There are many plates spinning at the moment which could threaten to derail this progress, although on valuation grounds alone the market is ripe for institutional investors looking to buy on any dips.
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These views are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees.