I am pleased to say we returned to the UK safely from our travels on Friday of last week and what a welcome the markets gave me when I had a quick look at my “trusty app” just after we landed at Heathrow. Clearly something had spooked all markets and it took very little time to realise that the latest Covid 19 variant in the form of Omicron was the main culprit!
We have often been told that all viruses will mutate many times and as they do so, they will typically weaken along the way. There have been a number of new variants since Delta which have pretty much gone unnoticed by markets and then all of a sudden, they get spooked by the latest manifestation.
I know that we often speak about volatility in the markets and sometimes it almost seems that a convenient excuse for a “correction” (selling off and profit taking) is all that is needed and I personally think there is an element of that at work here. After all, the experts tell us that the Delta variant is the dominant one at present and despite a recent spike in the number of cases in the UK, we are seeing the statistics relating to hospitalisations and Covid related deaths on the decline.
The main fear of markets is that further lockdowns and other restrictions will have a negative impact on the global economy and this was the key reason for the market falls. However, we are seeing strong and improving economic recovery in the UK and other western areas and that is allowing for the effects of Delta. It amused me the other day to read that he UK economy is now forecast to grow at a faster rate that China next year for the first time since the 1970’s! (UK 5.3% compared to China 5.2% - a small amount but it made a good headline!) Mind you, it does depend on who’s figures you look at!
It is all too easy to get swept along with days like last Friday, but we need to keep a wider focus and that is ably demonstrated by the bounce in major markets this side of the weekend with much of the downturn being reversed already.
As I have often said, volatility creates opportunity, and this is just another “blip” on the graph.
COP26 was the name given to the 26th United Nations Climate Change Conference held in Glasgow. I must say the cynic in me asks the question as to what achievements have there been from the previous 25 attempts and will we simply see lots of political commitments but what about the follow through. I suppose one should concede that the last major achievement was the Paris Agreement at COP21.
I think the major outcomes from 26 can be summarised as follows:
Unfortunately, there were some shortcomings too, the major one being a failure to meet the 1.5 degrees target C and a dilution in the wording for the use of coal to be “phased down” rather than “phased out” as had be originally proposed.
As always, only time will tell as to whether Governments follow through and at what pace, but clearly, we all have a vested interest on behalf of future generations to do our bit.
As the Advent Season has now started, we are seeing the Christmas lights and other decorations starting to go up and I dare say that this coming weekend will see a lot more activity in that department.
Last year, we took the decision to send Christmas greetings via email and the money that we would previously have spent on sending cards was donated to charity. Having received positive feedback from many people, we have decided to do the same again this year. The charities we are supporting this year at the Kent Surrey and Sussex Air Ambulance and MacMillan Cancer Support.
As always, stay safe.
From all at RAFP