SNAPSHOT2 min read

Market update – November 2020

A summary of our current economic and market views.



Charities Team

Markets volatile as second wave strikes

Markets experienced further volatility at the end of October as investors took fright at the resurgence of Covid-19. Restrictions on activity are being re-imposed across Europe; curfews have been announced in Italy and Spain, meanwhile France and Germany have declared second national lockdowns. There is still hope that one or more vaccines will receive approval this year, but this has not been able to allay concern about renewed economic disruption from the pandemic. Investors have also been disappointed by the lack of progress on further US stimulus measures, which will now have to wait until after the US election. The latest sell-off leaves global equities little changed year-to-date.  

Biden remains ahead in polls as US votes

Polls continue to point to a Biden victory in the upcoming US election. The Democrat candidate now has a larger lead in polls than Hillary Clinton had over Donald Trump in the weeks before the 2016 election. There has been a high level of early voting, suggesting turnout this year will also be high. Over 70 million Americans have already cast their vote, more than half the total turnout of the 2016 election, according to the US Elections Project. Many US states have made it easier to vote early in order to avoid crowding at polling stations. However, this could also contribute to a delay in determining the election outcome, as counting of postal votes in some states will not begin until election day.

Brexit uncertainty continues to weigh on UK

The UK and EU continue to negotiate a trade deal to take effect when the current transition period ends at the turn of the year. There is now more optimism that an agreement will be reached in time for ratification in 2020. The stakes remain high: businesses have had to devote significant time and resource to dealing with the pandemic and may have limited ability to respond to the additional challenges of a “no trade deal” Brexit. The US election also remains a complicating factor for the UK. Joe Biden has said that the US will not agree to a trade deal with the UK if Brexit threatens Northern Ireland’s peace agreements.

Portfolio positioning

Despite recent volatility, we expect that gradual economic recovery, combined with stimulus measures from governments and central banks, should continue to support global equity markets. However, we remain well prepared for periods of turbulence in markets. Where appropriate, we continue to reduce our UK equity exposure and transition portfolios towards a more global approach. This has served us well in recent months. We also maintain our allocation to gold in many multi-asset portfolios, as we believe it continues to offer valuable defensive and diversifying properties.

This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. 

Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.

This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.

All data contained within this document is sourced from Cazenove Capital unless otherwise stated.


Charities Team


Market views

The value of your investments and the income received from them can fall as well as rise. You may not get back the amount you invested.