Global Equities Poised To Close Out Stellar November

By Glenn Dyer | More Articles by Glenn Dyer

With just a day’s trading to go markets are poised for their best month on record.

Gains of 10% to more than 13% for developed markets and more than 20% for some emerging markets, are already in the bag.

The ASX is heading for an 11% plus gain for November, and given the solid start to trade today after Friday’s 39 point gain in ASX 200 futures trading, the rise could end up around 12%.

The disjointed holiday impacted close to last week on Wall Street didn’t stunt the optimism as global share markets pushed higher thanks to the growing realisation Donald Trump was out and the positive vaccine news helped offset fears about the short-term economic impact of lockdowns and rising infections and deaths in the US and Europe.

For the week US shares rose 2.3% to close at a record high (for the S&P 500 and Nasdaq) as President-elect Biden’s nomination of Janet Yellen as Treasury Secretary was greeted positively by the markets as having an ‘adult’ with deep understanding of the economy in markets back in charge.

Eurozone shares rose 1.8%, Japanese shares rose 4.4% and Chinese shares were up 0.8%.

Reflecting these positive global leads Australian shares rose 0.9% and back to their starting point for the year with gains being led by resources, utilities, financials (the big banks), property, and retailers.

Bond yields were little changed but metals, oil, and iron ore all rose as did the $A against a weaker $US.

The projected 11% plus gain for November for the ASX 200 will be well ahead of the previous all time monthly high of 8.4% in April in the early stages of the pandemic rebound.

The Dow is up nearly 13% for November so far, and if it holds its gains into today’s close, it will chalk up its best month since January 1987. The S&P is up 11.3% for the month.

The gain is its best performance since April’s 12.7%, which was the third-best month for the S&P 500 since its origin in 1957. And the Nasdaq is up 11.3% as well.

Offshore and Japanese shares up 16% and Eurozone shares up 17%.

And while many analysts will attribute the gains to the easing in political tensions and the new COVID vaccine candidates, the real story is that central banks, large and small and governments can be thanks (should be thanked) for these record and near-record gains.

There would have been no records without the trillions of dollars of lending programs, massive stimulus spending, jobs support and income programs, quantitative easing, and targeted lending to banks to keep lending to consumers and business

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →