Global stocks were lower last week, after being pulled down by the likes of Japan, the U.K, and the eurozone. US equities were positive, but a weakening dollar reduced returns for Irish investors. Stocks saw choppy trading in general throughout the week, with no individual theme dominating the headlines. President Biden marked his first 100 days in office, which has been dominated by the COVID vaccine rollout. However, in recent weeks he has been able to focus on other areas. For example, stocks were lower on Thursday following an announcement to double the long term CGT rate for wealthy Americans – a move that would have to navigate robust opposition to get through Congress.
Housing data in the US remains extremely positive with, new home sales surging over 20% in March from a year earlier. Weekly unemployment claims in the US came in lower than expected, dropping to the lowest level since the pandemic began. Some market participants are increasingly turning to this sort of ‘real time’ economic data given the volatility in some metrics. ‘Year-on-year’ numbers for many indicators are showing record numbers, given the extreme lows seen into Q2 2020. For example, the consensus is for this week’s GDP releases to contain some eye-catching numbers.
The ECB kept policy unchanged last week, as expected. The pace of asset purchases will continue unabated as the meeting commentary set a firmly ‘dovish’ tone. Eurozone PMI data released on Friday showed a record reading for the manufacturing component, with the services side moving back into expansion territory with a result of 50.3. This helped to push the composite figure to a 9 month high. Eurozone services data continues to lag the likes of the U.S and U.K, with continued restrictions as a result of a slower vaccine rollout being identified as the main cause. CLICK HERE