Another week, another battle between the bulls and the bears. Watching the stock markets is anything but dull right now.

First, the good news. Having lost its early lead to the Americans, AstraZeneca and Oxford University are back on the front foot this week, with positive results from their vaccine trial. One dosing regime - a small priming jab followed by a full dose later - looks to be 90% effective. That’s up there with the Pfizer and Moderna treatments, and suggests we really might be heading back to normal next year.

The AstraZeneca announcement could hardly have come at a better moment because other news, on the economy, was what we should expect two and a half weeks into another national lockdown. The purchasing managers’ index, a widely watched gauge of activity, fell to 45.8 in November from 51.4 the prior month for the all-important services sector.

That might have been a bit better than the consensus of economists’ forecasts, but it is well below the 50 level which indicates most businesses are suffering a contraction in activity. Today’s PMI data are the first indication that the economy is going to go backwards in the final three months of the year. The dreaded double-dip after the recovery in the September quarter.

Interestingly, growth in manufacturing accelerated in the latest snapshot. That’s a reflection of how the latest restrictions have deliberately been targeted at pubs, restaurants and leisure activities, while leaving work and education as normal as possible.

The trouble is that services account for about 80% of the UK economy. It’s just not possible for UK plc to be firing on all cylinders unless we can re-open the ‘non-essential’ activities that constitute the lion’s share of economic activity in a developed society.

That, in turn, is why we are so desperate for every crumb of good news on the vaccine front. And it’s why the stock market rallies every time another positive trial result emerges. Shares rose across Europe on the news.

Some might be puzzled that the stock market is doing as well as it is when the news on the pandemic front is still so troubling. They should not be surprised. This is how markets work, looking through today’s news to what we believe is coming down the pipeline. It’s what people mean when they say that the stock market discounts the future.

The key question now is how this fast-changing picture should be reflected in investment portfolios. This matters because the shares and funds which have done well through the pandemic will most likely not be the same as those that flourish as we get back to normal.

Stuck in lockdown, investors have preferred to shelter in the safety of companies which can deliver growth through thick and thin or which actually benefit from the changes to our lifestyles in lockdown. In a recovery, some of the shares which have suffered most (in travel, hospitality and leisure, for example) could bounce back strongly.

There is a huge amount of uncertainty about the speed and timing of the recovery and the extent to which the world will revert to its previous ways or be transformed by the pandemic. Because of that, we continue to believe that adopting a range of styles is the safest approach.

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Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.