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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.

Traders should watch this seasonal pattern closely as we inch closer to summer. In the shorter term, as noted above, it will be interesting to note how particular stocks form on the FTSE as the UK’s lockdown rules are peeled away – firms in the travel, hospitality, retail, and leisure space will all be expecting a sharp uptick in activity. Conversely, will the appeal of tech stock lessen as society reopens (and we are therefore less reliant on tech for all interactions and experiences)? These key questions are still be answered.

Gold’s weak start to 2021

Gold Exchange Traded Funds (ETFs) have been continuing to fall while US bond yields rise. This is a reflection of a more optimistic outlook as acknowledged by the Fed.

As the US economy whirrs back into life, rising yields will likely compound the bad start to the year that we have already witnessed for gold. In fact, it has been one of the worse starts for 20 years.

Usually, the start of the year is a period of strong demand for gold, with the Chinese Lunar New Year attracting buyers. Over the past ten years, gold has then been flat between April and June. In the 2013 taper tantrum, gold lost nearly 20% between March and September. If the Federal Reserve do start to talk about tapering watch for a potentially sharp sell-off in gold.

Cryptocurrencies making headlines

Cryptocurrencies are rarely out of the media spotlight, with widescale discussions around the fact Bitcoin is now valued at over $1.2 trillion – more than Mastercard MA, PayPal PYPL, and Visa V combined.

How long will these gains continue? This is the question so many people are asking. Also noteworthy is that Bitcoin’s latest valuation came in at the same time as Coinbase COIN went public on the Nasdaq stock market, making it the first-ever company specializing in cryptocurrencies to launch an initial public offering (IPO). This alone is a significant event that should be monitored. The advent of Coinbase offers many investors a straight bet in the crypto market which was otherwise not there. This is a key test for crypto buyers and strong gains in Coinbase will likely be met by strong gains in Bitcoin.

It is safe to say that the media attention on cryptocurrencies will remain strong for many months to come. Expect many more eye-catching headlines.