E Markets To Watch As UK Lockdown Restrictions Are Lifted

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There is a palpable sense of change in the UK as lockdown restrictions are slowly lifted across the four nations.

With the combination of the vaccine rollout and strict social distancing rules having the desired effect of curbing cases, hospitalizations, and deaths, society is coming back to life. Most schools have now reopened, as have many shops, pubs, restaurants, and gyms. Consequently, life feels far more normal than it did during the first three months of the year.

There seems to be far greater optimism that perhaps we are entering the final chapters of the pandemic with over 50% of the UK’s population now having COVID-19 antibodies. This is naturally impacting financial markets.

The relaxation of lockdown measures will affect different assets and markets. There has been a notable rise in construction activity in the UK as society begins to open up – the same will be true of the retail, hospitality, and leisure industries throughout April, May, and June. So, in what is set to be a period of marked change, what are the key trends that investors and traders ought to be monitoring over the coming months? Here are three that stand out to me…

Stock market summer slowdown?

We are approaching an interesting juncture for the stock markets. Stocks have been on a great run since March last year as investors have pumped huge amounts into global equities.

Tech giants have been among the main beneficiaries. The so-called FAANGs – Facebook FB, Amazon AMZN, Apple AAPL, Google (Alphabet) GOOGL, and Netflix NFLX – are trading at, or close to, their all-time highs. Meanwhile, the broader S&P 500 is 22% up on its pre-pandemic levels.

The big question is how long will this form continue?

Traders should watch for the arrival of the summer months. After all, the old adage to ‘sell in May, and go away’ is based on statistical data, which shows that stock markets tend not to gain between May and November.

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