Feb 02, 2021 / News

Financial Planning

Market Update (Summer 2020/21)

These past months saw record COVID-19 infections across US and Europe with many countries heading back into physical lockdowns. We also saw mixed economic data and a new US President elect. Despite all, the strong hopes of a vaccine before Christmas led our local share market to have one of its strongest months since 1988.

COVID-19 Outlook

In Australia, both Victoria and NSW experienced 26 and 24 days respectively of no community transmission over November. Melbourne, the most recent major hotspot for infections in Australia was able to temporarily eradicate COVID-19 with no active cases in the state by the end of the month. Unfortunately, an outbreak in Adelaide put the city into an extreme 6-day lockdown that was cut short 3 days early. 

In the US, daily infection rates hit all-time highs with more than 200,000 recorded infections and over 2,500 deaths per day reported over the month. As an indicator of the severity of the situation, we saw the New York City Public School system, the largest in the country, close as the percentage of positive tests over the 7 day rolling average hit a 3% circuit breaker level. Europe, like the US, faced a similar fate with most countries heading back into physical lockdowns in the hopes of flattening the curve and to remove stress across an overloaded healthcare system.

While this may have painted a very grim picture as we headed into the holiday season – November saw strong hopes for the success of stage 3 vaccine trials. Most notably AstraZeneca, Pfizer and Moderna, the last two reporting an effectiveness of more than 90%. This is in comparison to our normal annual flu jab that sits at 50-60%. Pfizer has submitted emergency approval to the US Food and Drug Authority (FDA), with Moderna not far behind. 

US Election

On November 7, the US went to the polls for what was one of the most hotly contested and divided elections in history. The lead up to the election polling data indicated a potential ‘bluewave’ – with the Democrats taking both houses and the oval office. In the proceeding days after the election, it became apparent that while Joe Biden would be the 46th US President, Biden will contend with the House of Representatives and Senate most likely being divided.

A divided house means it will be harder for Biden to get many of his campaign measures actioned, including raising of corporate taxes. Despite this outcome, markets welcomed the news of a new President as we saw the strongest post-election rally on record. 

About us

EMFS was formed in 2001 originally to service the financial planning needs of the clients of Nexia Edwards Marshall, Chartered Accountants. In addition, we now service clients referred by other accounting firms, lawyers and clients who are not serviced by Nexia Edwards Marshall. We manage funds totalling about $250m on behalf of clients.

Liability limited by a scheme approved under Professional Standards Legislation. Contents of this publication are general of nature and are not intended to be used for decision making purposes. Edwards Marshall Financial Solutions Pty Ltd ABN 45 096 434 842 is an Authorised Representative of Edwards Marshall Advisory Pty Ltd ABN 18 600 878 555. AFS Licence No. 479 792.