Investors pile into ‘everything rally’ over prospect of global recovery

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  • A member of the Bank of England’s Monetary Policy Committee contradicted the BoE governor, saying Covid-19 vaccines did not materially change the economic outlook for the UK

  • American Airlines said cash burn for the fourth quarter would be at the ‘high end’ of expectations with passenger demand likely to be volatile and difficult to forecast

  • A mild recovery in tourism helped lift the Greek economy 2.3 per cent in the third quarter

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Oil prices hit 9-month high but US jobs figures disappoint

Today’s news of oil prices hitting a nine-month high is just the latest sign of markets benefiting from the shot in the arm provided by coronavirus vaccine developments and their ability to raise hopes of economic recovery. 

And while data on new infections, particularly in the US, underline the fact that this pandemic is far from over, investors generally are finding it hard to contain their exuberance. Or as one seasoned investor comments: “Money is now so easy, why not borrow what you can and put it into stocks? That’s what our customers are doing, and they’re making a helluva lot of money.”

But the “everything rally”, explains global finance correspondent Robin Wigglesworth in his Big Read, has not just lifted stocks — it has also boosted everything from emerging markets to junk bonds and bitcoin. The only major casualties have been haven assets such as US Treasuries and gold. 

Chart of market capitalisation (MSCI All-Country World index, $tn) showing how stock markets have roared back

Despite the more optimistic economic outlook and rosier corporate prospects for 2021, risks still abound. Labour markets remain fragile, as shown by today’s disappointing US non-farm payrolls data, while some fear coronavirus aid from various governments could be withdrawn too soon and derail nascent recoveries. A new wave of infections triggered by relaxation of pandemic restrictions over the upcoming holiday period is also a real fear. 

Chart of Morgan Stanley’s regional earnings per share forecasts, 2020-22 (%)

One investment group founder adds another note of caution, pointing out that the global economy is still plagued by problems that predate the virus and have been exacerbated by it. “While we have this euphoria, it’s pretty hard to imagine the bubble breaking. But you look at the data and you think this thing could go next week,” he said.


The prospect of a faster economic recovery and rising consumer prices is also driving demand for US inflation-protected securities. Investors believe prices will rise thanks to easy monetary policy from central banks and new US fiscal stimulus, while the introduction of coronavirus vaccines will help return business activity to normal.

Line chart of US 10-year break-even rate (%) showing that inflation expectations are rising as investors eye economic recovery

Companies in Australia and New Zealand are facing heat from investors over paying bonuses and dividends after accepting government coronavirus aid. More than 17,000 Kiwi businesses have voluntarily repaid subsidies following a call from Prime Minister Jacinda Ardern “to do the right thing” if they had performed well during the crisis.

In the latest in our Lessons from Japan series, Tokyo bureau chief Robin Harding examines what UK investors could learn from the country’s period of minimal interest rates.


Warner Bros upset cinema chains by announcing that its new releases would be available to stream on the group’s HBO Max service at the same time as theatre release. Shares in operators AMC Entertainment and Cinemark dived on the news.

A “Zoom boom” is driving UK demand for cosmetic surgery procedures. One industry spokesperson said: “Lockdown Face has become a thing. We were inundated with queries saying, ‘I’ve noticed that my frown line is terrible, that my lips need doing, or my nose is crooked’.”

Bar chart of % of of plastic surgery activity carried out by British Association of Aesthetic Plastic Surgeons members, showing that breast surgery remains the most popular cosmetic procedure

Management editor Andrew Hill considers the opportunities thrown up by the crisis for managers to devolve decision-making power. For start-ups, he writes, there is a balance to be had between imposing too much structure and thus dampening entrepreneurial spirit, and letting an organisation become too reliant on a “freewheeling” culture that can go sour as the company grows.

Global economy

Today’s non-farm payroll data — the key measure of US employment — suggested the labour market recovery was slowing. Weekly jobless claims yesterday, however, fell more than expected — albeit while challenged over their accuracy. A bipartisan agreement on a new coronavirus stimulus package is “within reach”, according to Mitch McConnell, the most senior Republican in the Senate. New data underlined the urgency of the situation: daily US cases yesterday surged past 200,000 for the first time while the total number of hospitalisations passed 100,000.

German factory orders have climbed back to pre-pandemic levels but services industries in Europe — especially in Italy and Spain — are still weak. The UK’s dominant services sector suffered less in November’s lockdown than initially feared.

New business-friendly policies from the UK included an exemption from English quarantine restrictions for “high-value” business executives (as well as elite sports people and artists) on arrival in the country as well as hints of potential tax cuts. The country’s big supermarket operators, meanwhile, are returning £1.7bn in government pandemic aid.

Have your say

Coronavirus vaccines mean light at the end of the tunnel at last. But there’s a long way to go before the world can say goodbye to pandemic disruptions. Can governments roll out vaccine programmes swiftly, efficiently and fairly? And who should have priority? Please share your views with us — email us at Thanks

Rational Contrarian comments on Troubles of famed Paris bookshop expose French retail shift

What a fabulous world, where we all sit at home staring at a screen ordering online, rather than walking bookstore aisles, visiting restaurants, and the like . . . simply hanging out with our fellow travellers. No wonder people are acting strangely, and so many feel depressed and lonely. And yes, I include myself in that cohort. What is this world we are making? I don’t know the solution, but I’m quite sure this is a disaster from a psychological standpoint. And as the owner of a catering company, I am quite sure that the vaccine solution will not return the restaurant industry to anything near its previous state, at least for 5 to 10 years. Brace yourself for that, fellow travellers.

The essentials

In person or online? Part-time or full-time? What is the best business course to choose in these difficult times? Business education correspondent Jonathan Moules examines MBA options.

It’s been a bleak week for retail workers in the UK. What are your rights if you are affected by redundancy? Read our Q&A.

Working remotely and in extreme isolation is normal fare for one particular group of workers: astronauts. What lockdown lessons on building workplace relationships can we learn from Nasa and the European Space Agency?

European Space Agency astronaut Frank De Winne
European Space Agency astronaut Frank De Winne’s time in space has equipped him with the tools to handle stress on earth © Nasa


Bookmark this: there are more than 300 coronavirus vaccine candidates, utilising a range of different techniques and at different stages of regulatory approval. Here’s our guide to the big hopes.

Final thought

MuMo is a project bringing contemporary art across Europe and Africa to children and communities who never get the chance to see it, an initiative all the more important in these extraordinary times of restricted mobility. It’s the reverse of traditional practices, explains its founder: “You don’t go to the museum, the museum comes to you.”

The MuMo truck, which is working with France’s Centre Pompidou in 2021
The MuMo truck, which is working with France’s Centre Pompidou in 2021

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