The major equity markets were positive last week despite the concerns about the rise in US 10-year Treasury yields. These concerns were eased by a better than expected US non-farm payrolls report. 379,000 jobs were added last month and that beat economists’ expectations of 210,000.
Weekly performance up to 5 March 2021
FTSE 100 (UK)
Dow 30 (US)
Euro Stoxx 50 (Europe)
Nikkei 225 (Japan)
In terms of £ Sterling, it closed the week (to 5 March), at 1.38 US Dollars, which was 0.7% lower than the figure at the end of the previous week (26 February). Against the Euro, £ Sterling closed on 5 March at 1.16 Euros, which was up 0.7% on the closing figure on 26 February.
Inflation, as measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH), was 0.9% in January 2021 (this is January’s data which is reported in February). This was up from 0.8% in the previous month, largely as a result of rising furniture and household goods, restaurants and hotels, food and transport costs. The 12-month rate for the Consumer Prices Index (CPI) rate which excludes owner occupied housing costs and council tax was 0.7% in January, up from 0.6% in December.
There were no further changes to the Bank of England base rate last week following the two previous cuts in March. The current rate remains at 0.1%.
The Omnis Managed funds, Openwork Graphene Model Portfolios and Omnis Managed Portfolio Service provide you with a diversified asset allocation in line with your Attitude to Risk, investing in Developed Market Equities, such as UK, US, Europe and Asia Pacific as well as Emerging Market equities. Cautious and Balanced investors will also have significant holdings in UK and Global Bonds, as well as Alternative Strategies. We believe this multi-asset approach aims to minimise global equity market falls in volatile periods.
WEEKLY MARKET PODCAST 8th MARCH:
It was a mixed week for stock markets globally. The week’s news focussed on inflation concerns, business confidence, stimulus packages, the easing of restrictions and vaccination progress. In the UK, Rishi Sunak’s Spring Budget called for more fiscal stimulus.
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US: A step closer for the $1.9 trillion stimulus package
The US Senate has voted to approve President Biden’s $1.9 trillion stimulus package. Fears of rising inflation amidst hopes of economic growth send Treasury yields higher and weighed on stock markets.
Asia: Mixed week but with improving business confidence
Chinese shares fell and Japanese stock markets had a mixed week. The Japanese manufacturing sector grew for the first time in two years, whilst the services sector saw a fall in activity. Chinese manufacturing and services data was weaker than expected.
Europe: Vaccinations, lockdowns and economic recovery
The EuroStoxx 50 ended the week higher buoyed by prospects of easing restrictions and monetary and fiscal policies which could set the stage for an economic recovery. Italy blocks export of Covid-19 vaccine to Australia.
UK: Spring Budget and improving economic forecasts
A “Spend Now, Tax Later” Budget, the Office for Budget Responsibility’s projections that the economy would recover sooner than expected, and a weaker Pound sent the FTSE 100 up 2.5% during the week.
The Week Ahead
• In the UK, GDP numbers for January will be in focus
• In Europe, the ECB meets this week and industrial production data will be published
• In the US, all eyes will be on Joe Biden’s stimulus package.
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