Global Markets Update – Monday 19 April 2021


Global stocks reached fresh highs and bonds rallied sharply following the release of upbeat economic data in the US and reassurances that the Federal Reserve will continue to support financial markets.

Johnson & Johnson (J&J) said it would delay the distribution of its vaccine in Europe after US health agencies called for a pause of the jab’s use on Americans while they investigated several rare incidents of blood clots. The J&J vaccine uses the same viral vector technology as AstraZeneca’s vaccine, which has also been linked to blood clots, as well as Russia’s Sputnik V vaccine.


The FTSE 100 rallied 1.5% over the week, closing above 7,000 for the first time since February 2020 as investors continued to rotate into value stocks. The FTSE 100 has the highest weighting of value shares (stocks in old economy industries that are sensitive to the economic outlook) of all major stock markets.

England relaxed lockdown restrictions for the first time in 2021. Non-essential shops opened, as did outside hospitality and leisure facilities along with gyms and personal-care facilities, with people being allowed to meet up to 5 others outdoors. The UK’s other nations are also relaxing restrictions, with each taking a slightly different approach.

UK GDP grew 0.4% in February, helped by a partial rebound in trade with the EU as businesses learnt to deal with lockdown and new Brexit border restrictions. This followed a 2.2% fall in January. The service sector grew 0.2% in February, as wholesale and retail trade sales picked up a little.

UK exports to the EU jumped by 46.6% in February, following January’s 42% slump, but remained their levels in 2020.


The S&P 500 rose 1.2% over the week, closing at yet another record high.

Fed chair Jay Powell reiterated that the central bank would maintain its asset purchase programme until “substantial progress” had been made towards full employment in the US.

US retail sales rose 9.8% in March, the strongest increase in 10 months. Spending was bolstered by the arrival of a fresh round of federal stimulus cheques and the accelerating vaccine rollout. The surge compares to a drop of 2.7% in February amid severe winter weather.

Headline US inflation rose 0.6% in March, the strongest monthly increase since August 2012 and taking the year-on-year rate to 2.6%. Core inflation registered a monthly gain of 0.3%, which was up 1.6% from a year ago.

As the first-quarter earnings season kicked off, Bank of America produced quarterly results that beat analysts’ forecasts and announced a $25bn share buyback. BlackRock revealed its assets under management had surged to a record $9tn, exceeding analysts’ revenue estimates. JPMorgan reported a five-fold gain in profits because it did not have to use billions of dollars it had set aside for covering bad loans. Goldman Sachs also reported strong results.


The FTSEurofirst 300 gained 1.2% over the week, setting new highs.

The IMF urged eurozone countries to increase government spending by an extra 3% of gross domestic product over the next year to mitigate the economic impact of the coronavirus pandemic. While the eurozone continues to lag the US and UK in the percentage of people vaccinated, the pace of daily inoculations has picked up in April.


The Nikkei 225 lost 2.5% over the week.

Pacific Basin

China’s economy grew 18.3% in the first quarter of 2021 on a year-on-year basis. The jump in GDP is the biggest since records began in 1992, although it slightly missed expectations and was flattered by a low base in March 2020. In other news, industrial output rose 14.1% in March compared to a year ago, while retail sales grew 34.2%.

China’s regulators ordered Ant Group to “cut off” the “improper connections” between its payment platform and its financial products. The move could strip Ant down to a mobile-payments platform, which only constitutes around 36% of the company’s revenues at present – the remainder come from digital finance.

China said it would mix and match vaccine jabs amid worries of the efficacy of the vaccines developed by Sinopharm and Sinovac.

Emerging Markets

Turkey’s new central bank governor left the country’s benchmark interest rate unchanged but signalled that policy could be loosened if inflation showed signs of slowing.

Hopes of improved relations between the US and Russia were dashed when the Biden administration imposed sanctions against Moscow, including banning trading in new Russian sovereign debt. The measures were levied in response to alleged Russian involvement in the SolarWinds hack, attempts to interfere in US elections and in response to a build-up of Russian troops on the broader with Ukraine.

India tightened curbs in an effort to contain a surge in COVID-19 infections, with daily cases topping 200,000. Authorities in Maharashtra, home to Mumbai, ordered all non-essential businesses to shut and hard weekend lockdowns until the end of April.


Bond markets rallied following supportive comments from the US Federal Reserve. The yield on the 10-year US Treasury bond closed the week at 1.57%, while the 10-year German Bund yield ended at -0.26%.


The Russian rouble weakened amid fears over US sanctions due in part to Moscow’s latest military build-up on the border with Ukraine.


Brent crude climbed to $66.80 a barrel, its highest level in almost a month, after the Paris-based International Energy Agency lifted its demand forecast for this year.

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Image by Gerd Altmann from Pixabay