Market Monitor - 30 April 2021

Market Monitor – 30 April 2021

Global stock markets have managed to consolidate their recent gains this week, with optimism about a return to economic normality over the course of 2021 still the main focus.

But investors’ positivity has been tempered by the growing Covid-19 crisis in India and other developing nations. The World Health Organisation has warned that countries in Europe and North America could see another pandemic surge if they relax restrictions too soon.

As was the case last week, company earnings reports have been the main drivers of share-price movements, although markets also welcomed another announcement from the Federal Reserve in America confirming that with the country’s economic recovery remaining relatively uneven, it would take no steps for the time being to hike interest rates or turn off the monetary stimulus taps.

The US

As was the case last week, company earnings reports have been the main drivers of share-price movements, although markets also welcomed another announcement from the Federal Reserve in America confirming that with the country’s economic recovery remaining relatively uneven, it would take no steps for the time being to hike interest rates or turn off the monetary stimulus taps.

Outside the technology sector, carmaker Ford warned that the global shortage in semiconductors is likely to lead to lower production levels in the current quarter: its shares dropped by nearly 10% on the news.

Overall, though, the US economy continues to recover from the worst of the pandemic: Thursday’s annualised GDP figure of 6.4% was a touch lower than expectations, but it nonetheless means that the American economy is on course to return to its pre-Covid size in the next couple of months.

The UK & Europe

In the UK, the FTSE 100 ended Thursday 1.2% down for the week despite the fact that Britain’s vaccination programme – combined with the first-quarter lockdown – appears to be keeping infection levels under control so far during reopening. The government’s efforts to support the housing market have borne fruit, with property prices continuing to rise, while UK inflation is also on an upward trajectory according to the latest data.

Following the apparent success of the UK’s vaccination programme, analysts at the EY ITEM Club have predicted that the British economy will grow faster in 2021 and return to its pre-pandemic size in the first half of next year, earlier than previously expected.

Solid results from the likes of BP, HSBC, Lloyds and NatWest also helped keep the London market buoyant: UK banks in particular have benefited from the extensive government support for businesses and workers, with the volume of loan defaults generally lower than feared.

In Frankfurt, the DAX index ended Thursday’s session down 0.8% for the week, while France’s CAC 40 gained 0.7%. In Germany, rising inflation and unemployment have spooked investors, while the semiconductor shortage has had a disproportionately large impact on the country’s sizeable manufacturing sector. However, business confidence across the eurozone is on the rise as the European Union’s vaccination roll-out finally clicks into gear.

April 23
April 29
Change (%)
FTSE 100
6938.6
6961.5
0.3
FTSE All-share
3965.2
3977.0
0.3
S&P 500
4180.2
4211.5
0.7
Dow Jones
34043.5
34060.4
0.0
DAX
15279.6
15154.2
-0.8
CAC 40
6257.9
6302.6
0.7
ACWI
703.7
707.2
0.5

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 29 April 2021.

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30 April 2021
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