Market Monitor - 26 March 2021
Insights

Market Monitor – 26 March 2021

Pessimism about the economic recovery from Covid-19 has held stock markets back during another week of lacklustre performance. While the focus over most of March has been on the potential for a rapid post-pandemic bounce to drive inflation higher, new waves of infections in the European Union in particular are giving investors pause for thought.
A number of EU governments have recently introduced new lockdowns – or are considering doing so – in response to a threat of a third wave. The situation has not been helped by the fact Europe’s vaccine roll-out has been problematic.
As markets closed last night, EU leaders were meeting to debate the introduction of new export controls on vaccines manufactured within the bloc – a move that has already attracted considerable criticism, not just from other nations but also from the likes of Jean-Claude Juncker, the former president of the European Commission.
There have been some reasons to be cheerful, however. Gloom in the stock markets has helped to drive bond yields lower: as more investors buy bonds in lieu of shares, their price rises and yield falls. Higher yields in recent weeks have contributed to concerns about rising interest rates in future, which has helped to depress share values.

The economic data published this week has largely been positive: on Thursday, for example, the United States reported its lowest rate of new unemployment claims since the start of the pandemic¹, while US GDP was revised upwards, from 4.1% to 4.3%, for the last three months of 2020².

In the eurozone, meanwhile, new figures showed a strong uptick in business activity so far in March – but investors appear to be more concerned about the coronavirus-related challenges that could emerge as we move into the spring.

The US

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday level for the week so far, with the S&P 500 down fractionally.

Declining bond yields later in the week helped technology stocks to regain some ground, but there are growing concerns that trade tensions between the US and China on human-rights grounds could hamper global growth this year.

The UK and Europe

In the UK, the FTSE 100 ended Thursday 0.5% down for the week, with investors nervous about the potential impact of an EU export ban on Britain’s hitherto successful vaccination programme.

The declining oil price has also affected the energy companies listed in London: crude values have slumped as a result of global economic growth concerns – and despite the disruption to international oil supplies caused by the ongoing blockage of the Suez Canal by the beached Ever Given container ship.

In Frankfurt, the DAX index ended Thursday’s session level for the week, while France’s CAC 40 lost 0.8%. In Germany, there was some relief as Chancellor Angela Merkel’s plans for a “short, sharp” lockdown over Easter in response to the latest upswing in infection rates were shelved. But European investors are hoping that an acceleration of the bloc’s vaccination programme in the coming weeks can start to bring the pandemic under control.

Mar 19
Mar 25
Change (%)
FTSE 100
6708.7
6674.8
-0.5
FTSE All-share
3824.9
3804.8
-0.5
S&P 500
3913.1
3909.5
-0.1
Dow Jones
32628.0
32619.5
0.0
DAX
14621.0
14621.4
0.0
CAC 40
5998.0
5952.4
-0.8
ACWI
671.4
663.8
-1.1

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 25/3/2021.

¹ Unemployment insurance weekly claims, US Department of Labor, 25,3,2021.

² GDP (Third estimate), Bureau of Economic Analysis, US Department of Commerce, 25/3/2021.

26 March 2021
Mark King
Mark King
Head of Investment Content
Share article
Share on twitter
Share on linkedin
Share on email
Key topics
Related topics
Share article
Share on twitter
Share on linkedin
Share on email
Key topics
Related topics

PDF

Market Monitor – 26 March 2021

Important information

This is an advertising document.

Past performance is not a guide to future performance. The value of investments and any income is not guaranteed and can go down as well as up and may be affected by exchange rate fluctuations. This means that an investor may not get back the amount invested. Your capital is at risk.

The analysis included in this document has been produced by Columbia Threadneedle Investments for its own investment management activities, may have been acted upon prior to publication and is made available here incidentally. Any opinions expressed are made as at the date of publication but are subject to change without notice and should not be seen as investment advice. Information obtained from external sources is believed to be reliable, but its accuracy or completeness cannot be guaranteed.

Any opinions expressed are made as at the date of publication but are subject to change without notice. This presentation includes forward looking statements, including projections of future economic and financial conditions. None of Columbia Threadneedle Investments, its directors, officers or employees make any representation, warranty, guaranty, or other assurance that any of these forward-looking statements will prove to be accurate.

The mention of any specific shares or bonds should not be taken as a recommendation to deal.

In the UK: issued by Threadneedle Asset Management Limited, registered in England and Wales, No. 573204. Registered Office: Cannon Place, 78 Cannon Street, London EC4N 6AG. Authorised and regulated in the UK by the Financial Conduct Authority.

Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.

columbiathreadneedle.com

Related Insights

27 July 2021

Fixed Income Desk

In Credit - Weekly Snapshot

In Credit Weekly Snapshot – July 2021

Our fixed income team provide their weekly snapshot of market events.
Read time - 3 min
23 July 2021

Mark King

Head of Investment Content

Market Monitor - 23 July 2021

In another highly volatile week, stock markets around the world have managed to claw back some of their early losses – but concerns about the impact of the Delta coronavirus variant are very much to the fore.
Read time - 2 min
16 July 2021

Mark King

Head of Investment Content

Market Monitor - 16 July 2021

Stock markets around the world have struggled to gain momentum this week with mixed economic data and renewed inflation fears acting to limit gains.
Read time - 2 min

You may also like

Investment approach

Teamwork defines us and is fundamental to our investment approach, which is structured to facilitate the generation, assessment and implementation of good, strong investment ideas for our portfolios.

Funds and Prices

Columbia Threadneedle Investments has a comprehensive range of investment funds catering for a broad range of objectives.

Our Capabilities

We offer a broad range of actively managed investment strategies and solutions covering global, regional and domestic markets and asset classes.