27th October 2021
In what has been a positive start to the week for markets, data releases have been somewhat muted. That being said, it is the US that has been prominent in terms of news flow with Sunday seeing the House speaker, Nancy Pelosi, express an element of confidence that the Democrats were close to signing off on President Biden’s social agenda. Pelosi’s comments follow Sunday’s meeting between President Biden and two Senate Democrats (Chuck Schumer and Joe Manchin) that was designed to hammer out the detail of Biden’s proposed $3.5 trillion social spending package. Whilst it is looking more likely the agreed package will look closer to £2 trillion in size, and it is yet to be agreed what elements of the bill will be excluded, we are now one step closer to a significant capital injection. This has aided in steadying markets and will be a buoy for the US economy. The progression in talks comes ahead of the President’s trip to Glasgow later in the week to attend the UN climate change conference. Biden stated he hopes to have an agreed budget bill ahead of flying to the conference, which in theory would allow for a possible vote in Congress at the end of the week… and whilst this could be slightly optimistic, an agreed package is nearing!
Policy aside, we are also amidst the third quarter earnings season, already seeing companies such as Alphabet (Google) and Microsoft report strong sets of numbers.
Elsewhere, we have seen that global supply chain constraints, specifically from China, have given a huge boost to Indian corporates, particularly in the technology space. Data released this week shows that a number of companies in the space have gained significant traction and growth this year, largely driven by hopes that many of the names will continue to successfully sell their products globally over the long term. The growth portfolios overweight to India have borne this out year to date, with Indian names being some of the biggest contributors.
All eyes now remain on the European Central Bank’s policy meeting later today, and of course the UK Chancellor, Rishi Sunak, and his Autumn Budget at 12.30 pm.
Jonathan Wiseman, Fund Manager
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