The start of the Joe Biden transition, news that Janet Yellen will be the new US Treasury Secretary plus hope of early Covid-19 vaccines continue to underpin positive equity market momentum as a return to normality in 2021 begins to beckon. However, such exuberance carries risks, especially when the fundamental backdrop remains so challenging and the ability to get things done could still remain constrained.
November has been a strong month for equity markets, with global stocks on course for one of their biggest monthly rises on record. The MSCI World Index has risen by 13 per cent so far in November, with just one day of the month remaining.
Already, more than $77 billion has been put to work in US-listed exchange-traded funds this month, and according to EPFR, a platform that provides data on investor flows around the world, emerging market equity inflows rose by a substantial $14bn in the last two weeks alone.
A softer dollar is probably playing its part in supporting equities and is also helping to propel commodities such as oil and copper to higher levels. Bitcoin has also been a notable beneficiary, retesting and surpassing its 2017 highs.
Having overcome some initial anxiety about the US election, and as Donald Trump’s legal challenges evaporated, markets started to embrace the contours of the new Biden administration as the transition finally began to get under way. Combined with the reality that three Covid-19 vaccines were also on their way, positives started to outweigh residual concerns, with the focus turning to the probability that more financial stimulus is likely to be seen soon.
A particular source of optimism is that Mrs Yellen, the former Federal Reserve chair, is being tapped to take over the helm of the Department of Treasury. If appointed, she will be the first person to hold the top three economic positions in government – at the Federal Reserve, the Council of Economic Advisers and now at the Department of Treasury.
Given the strength and breadth of her experience, Mrs Yellen will be a very reassuring figure to financial markets, especially at a time when the relationship between the Fed and the Treasury was beginning to fray following the decision by current Treasury Secretary Steven Mnuchin to close some of the Fed’s emergency lending facilities.
As a former Fed chair, she is uniquely placed to understand the importance of government fiscal stimulus programmes, particularly as there is limited room for more quantitative easing.
Markets might have been able to absorb the slower data until now, but this is likely to get much worse in coming months as stricter virus control measures are introduced
With less than two months until the US presidential inauguration, markets appear willing to look through the pain currently being exhibited by the economy and are instead focusing on a better world that may lie ahead. However, such unalloyed optimism is not without risks, especially at a time when market sentiment, price action and market positioning are all pointing one way.
It is worth remembering that a number of significant hurdles will confront investors in the coming months. Markets might have been able to absorb the slower data until now, but this is likely to get much worse in coming months as stricter virus control measures are introduced.
At the end of December, two emergency employment programmes are also due to expire, at a time when household indebtedness is rising and US unemployment remains elevated. US personal income declined 0.7 per cent in October and spending increased 0.5 per cent, highlighting how consumers are drawing down savings to maintain current levels of spending, with the savings rate slipping to 13.6 per cent from a record high of 33.7 per cent in April.
Unless new measures are introduced, fiscal policy will become a drag on economic growth in coming quarters, making it all the more important that the next US administration moves fast to head off any further slowing in activity. However, a gridlock may get in the way in Washington if the Democrats do not win the two remaining Senate seats being contested in January in Georgia.
So while appointing Mrs Yellen appears to be a step in the right direction, the new US government’s ability to move as fast as it would like to may still end up being impeded, with investors seeing their patience tested.
Tim Fox is a prominent regional economist and financial markets analyst, and an adviser to St Gotthard Fund Management in Switzerland
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2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
US PGA Championship in numbers
1 Joost Luiten produced a memorable hole in one at the par-three fourth in the first round.
2 To date, the only two players to win the PGA Championship after winning the week before are Rory McIlroy (2014 WGC-Bridgestone Invitational) and Tiger Woods (2007, WGC-Bridgestone Invitational). Hideki Matsuyama or Chris Stroud could have made it three.
3 Number of seasons without a major for McIlroy, who finished in a tie for 22nd.
4 Louis Oosthuizen has now finished second in all four of the game's major championships.
5 In the fifth hole of the final round, McIlroy holed his longest putt of the week - from 16ft 8in - for birdie.
6 For the sixth successive year, play was disrupted by bad weather with a delay of one hour and 43 minutes on Friday.
7 Seven under par (64) was the best round of the week, shot by Matsuyama and Francesco Molinari on Day 2.
8 Number of shots taken by Jason Day on the 18th hole in round three after a risky recovery shot backfired.
9 Jon Rahm's age in months the last time Phil Mickelson missed the cut in the US PGA, in 1995.
10 Jimmy Walker's opening round as defending champion was a 10-over-par 81.
11 The par-four 11th coincidentally ranked as the 11th hardest hole overall with a scoring average of 4.192.
12 Paul Casey was a combined 12 under par for his first round in this year's majors.
13 The average world ranking of the last 13 PGA winners before this week was 25. Kevin Kisner began the week ranked 25th.
14 The world ranking of Justin Thomas before his victory.
15 Of the top 15 players after 54 holes, only Oosthuizen had previously won a major.
16 The par-four 16th marks the start of Quail Hollow's so-called "Green Mile" of finishing holes, some of the toughest in golf.
17 The first round scoring average of the last 17 major champions was 67.2. Kisner and Thorbjorn Olesen shot 67 on day one at Quail Hollow.
18 For the first time in 18 majors, the eventual winner was over par after round one (Thomas shot 73).
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Yadoo’s House Restaurant & Cafe
For the karak and Yoodo's house platter with includes eggs, balaleet, khamir and chebab bread.
Golden Dallah
For the cappuccino, luqaimat and aseeda.
Al Mrzab Restaurant
For the shrimp murabian and Kuwaiti options including Kuwaiti machboos with kebab and spicy sauce.
Al Derwaza
For the fish hubul, regag bread, biryani and special seafood soup.
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One in nine do not have enough to eat
Created in 1961, the World Food Programme is pledged to fight hunger worldwide as well as providing emergency food assistance in a crisis.
One of the organisation’s goals is the Zero Hunger Pledge, adopted by the international community in 2015 as one of the 17 Sustainable Goals for Sustainable Development, to end world hunger by 2030.
The WFP, a branch of the United Nations, is funded by voluntary donations from governments, businesses and private donations.
Almost two thirds of its operations currently take place in conflict zones, where it is calculated that people are more than three times likely to suffer from malnutrition than in peaceful countries.
It is currently estimated that one in nine people globally do not have enough to eat.
On any one day, the WFP estimates that it has 5,000 lorries, 20 ships and 70 aircraft on the move.
Outside emergencies, the WFP provides school meals to up to 25 million children in 63 countries, while working with communities to improve nutrition. Where possible, it buys supplies from developing countries to cut down transport cost and boost local economies.
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The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
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2021 World Triathlon Championship Series
May 15: Yokohama, Japan
June 5: Leeds, UK
June 24: Montreal, Canada
July 10: Hamburg, Germany
Aug 17-22: Edmonton, Canada (World Triathlon Championship Final)
Nov 5-6 : Abu Dhabi, UAE
Date TBC: Chengdu, China
MATCH INFO
Argentina 47 (Tries: Sanchez, Tuculet (2), Mallia (2), De La Fuente, Bertranou; Cons: Sanchez 5, Urdapilleta)
United States 17 (Tries: Scully (2), Lasike; Cons: MacGinty)
Mohammed bin Zayed Majlis
MATCH DETAILS
Juventus 2 (Bonucci 36, Ronaldo 90 6)
Genoa 1 (Kouame 40)
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Key 2013/14 UAE Motorsport dates
October 4: Round One of Rotax Max Challenge, Al Ain (karting)
October 1: 1 Round One of the inaugural UAE Desert Championship (rally)
November 1-3: Abu Dhabi Grand Prix (Formula One)
November 28-30: Dubai International Rally
January 9-11: 24Hrs of Dubai (Touring Cars / Endurance)
March 21: Round 11 of Rotax Max Challenge, Muscat, Oman (karting)
April 4-10: Abu Dhabi Desert Challenge (Endurance)
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
Fifa Club World Cup quarter-final
Esperance de Tunis 0
Al Ain 3 (Ahmed 02’, El Shahat 17’, Al Ahbabi 60’)
EMERGENCY PHONE NUMBERS
Estijaba – 8001717 – number to call to request coronavirus testing
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Mobile phone packages comparison
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
