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Archinomics Weekly - Tuesday 4th May 2021

5 months ago

the
MARKETS

Equities

Despite some promising economic data releases in the US, the Dow Jones and Nasdaq both ended the week lower while the S&P 500 was flat. In Europe, the German and Italian markets fell by around 1%, while the French, Spanish and UK markets made gains over the week. The MSCI Emerging Markets index lost 0.4%, as the Chinese market was dragged lower by weak PMI data and the continued crackdown on tech companies.

Bonds

Government bond prices in the US, UK and Europe were all weaker last week (and yields rose). In Europe, yields rose on the back of high German inflation data and concerns that the Federal Reserve could taper its bond-buying programme. Investment grade corporate bonds were also lower in the US and Europe, while high yield bonds were slightly higher in both regions.

Currencies

The US dollar benefited from its perceived safe haven status last week, rising against sterling, the euro and the yen. Sterling rose against the euro and yen, but fell against the dollar. The euro was weaker against the dollar and the pound, but rose against the yen. The yen was weaker across the board.

Commodities

Despite a sell-off on Friday, the price of oil rose last week, with Brent Crude climbing 1.7% to $67.30 per barrel. Gold fell slightly over the week, to finish at $1,769 per ounce. The price of copper continued its meteoric rise, gaining 3.3% over the week and hitting a 10-year high above $10,000 per tonne.

Responsible investing

President Biden hosted a virtual climate summit, where 40 world leaders discussed the growing issue of climate change and the action that must be taken to address it. Several countries announced new carbon emission targets, and plenty of airtime was given to the economic opportunities arising from the transition to a low-carbon world.

MACROECONOMIC
UPDATE

President Biden announced plans for a new $1.8 trillion fiscal stimulus package, named the ‘American Families Plan’.


It was a busy week for US corporate earnings, with 180 constituents of the S&P 500 releasing their results. These included tech giants Facebook and Alphabet, both of which exceeded analysts’ expectations.


Jerome Powell reiterated that the Federal Reserve was not yet considering raising interest rates. The Chairman of the Fed also confirmed that there were currently no plans for a reduction in the central bank’s bond-buying programme.

on the
RADAR

On Friday the US Department of Labor will release its monthly non-farm payroll data, giving new insight into the state of the US employment market.


There will be new PMI data releases for a wide range of regions, including the US and Europe. The data have been trending higher in recent months, and this is expected to continue.

Listen to our weekly podcast for more information and our experts’ insights.

Architas

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