Global stocks have enjoyed their best month since 1988. The MSCI World index gained 12.6% in November, says David Randall on Reuters. Around $6.7trn was added to the value of global shares, equivalent to “$155m a minute”.
The pan-European Stoxx 600 enjoyed its best ever month, gaining 13.7% as the French and Italian markets notched up record returns. The FTSE 100 also had a record month (see page 5). The 15% gain on Japan’s Nikkei index was its best showing since 1994.
A month that started with Joe Biden’s election victory and progressed with a positive stream of vaccine updates kept investors in good spirits, say Claire Ballentine and Katherine Greifeld on Bloomberg. America’s S&P 500 gained 11%, a rare instance of it lagging the global average. The key theme of the month was rotation as investors moved out of tech shares and began to buy a broader range of smaller and more cyclical stocks. The tech giants lagged small caps. That goes to show that the market is finally “widening”, says Karen Langley in The Wall Street Journal. This year’s rally has been heavily concentrated in a handful of sectors. In September only 153 of the 500 shares in the S&P 500 made gains; in November, 467 did. A 17% jump in US financial shares gave the sub-index its “best month since April 2009”.
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Another boost came from positive earnings news. Average S&P 500 third-quarter earnings came in only 6% lower than last year, defying predictions of a 21% slump. It is extraordinary that global markets have gained this year, even as “the virus is still on the rampage”, says Rupert Thompson of Kingswood. In a year where massive central bank support has juiced markets, rarely has the old saying, “don’t fight the Fed”, been so true.
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