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CHRIS BURRELL ’ S BLOG
In the event that the electorate was to decide to support Biden in the Senate run-offs , markets may be more concerned .
The mismanagement by the USA of Covid-19 means that the US is facing a critical emergency over the next few months , before vaccines are fully administered in the later part of the year . Your diarist has opined that the US may well face a 3-6 week shut down following the Biden inauguration in the third week of January . This may be a catalyst for the US market to correct . All that is being predicted here is that Biden will follow the Australian lead i . e . he will defer to the health professionals and the health professionals will interact with the US States . Already a number of States are at level 4 restrictions .
� The UK and Europe are also suffering badly from the resurgence of Covid and again there are level 4 restrictions in a number of European countries . The UK has announced a level 5 lockdown until mid-February .
There is a real probability that if there is to be a weakness in international markets , the shutdowns will reverse some of the Christmas 2020 rally in international markets . Burrell advisors are looking for buying opportunities during any corrections in the February / April 2021 period .
In both Australia and internationally , low interest rates became even lower in 2020 with central banks and fiscal stimulus from governments flooding the economies with liquidity . Against this backdrop of a record low risk free rate i . e . 10 year bond , equities in 2021 have an upward bias . This will result in FOMO ( fear-of-missing-out ) rallies , punctuated by reality checks from health and geopolitical events . Gold may be well supported , while infrastructure spending will replace some government income . Increased business failures are likely in Covid impacted businesses .
Happy New Year and All the Best for 2021 ,
Chris Burrell Managing Director
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