Volatility associated with November’s US election should finally be over, enabling investors to refocus on economic prospects and the outlook for corporate profitability and central bank policy.
Joe Biden was sworn in as the 46th President of the US. The transition of power was far from smooth however, with pro-Trump demonstrators storm- ing the Capitol ahead of Biden’s inauguration. This caused some temporary alarm. Calm had been restored by month end, but America appears to be deeply divided, potentially presenting Biden with some unwanted distrac- tions over the next four years.
Otherwise there were few key developments in financial markets. Central banks kept policy settings unchanged and governments remained focused on administering the rollout of Covid vaccines.
Encouragingly, the International Monetary Fund increased its global GDP growth forecast for this year by 0.3%, to 5.5%. The upward revision reflected the expected positive effects of vaccinations, additional policy support in major economies including the US and Japan, and an expected rise in con- tact intensive activities as the pandemic eases.
PDF VIEW: Informed Investor – February 2021