MARKET UPDATE – 22 MARCH 2021: BOND INVESTING

Bond yields continue to rise amidst economic optimism. Overall stock markets performed poorly across the week. Vaccination rates in the US and UK continue on a positive trend whilst Europe faces fresh restrictions and cases rise in several counties.

• US: Bond yields continue to rise and 100 million vaccine doses
  Despite a strong start, the S&P 500 was down 0.7% during the week, as bond yields continue to rise. The Federal Reserve said they do not expect interest rate hikes until 100 million vaccination doses have now been administered across the country.

• Asia: Mixed performance in Japan whilst Chinese shares fall
  Mixed performance in Japan’s stock markets over the week. Japan’s exports fell faster than expected in February. Chinese stocks fell over the week: the Shanghai Composite Index was down 1.4%. Day 1 of the US-China meeting triggered negative headlines.

• Europe: Muted market performance as infections increase
  The EuroStoxx 50 was up 0.1%. Central banks maintained their dovish policy stance to support an economic recovery but concerns about a resurgence in infections limited upside. Oxford-AstraZeneca deemed ‘safe’ prompting countries to resume its use.

• UK: More than half of adult population has received first dose
  The FTSE 100 and FTSE 250 declined 0.7% and 0.4% respectively. The Bank of England (BoE) keeps interest rates at 0.1%. More than half of the adult population have now received at least one dose of a vaccine.

• The Week Ahead
  • In the UK, inflation, manufacturing, services, and retail sales data released
  • In Europe, economic data being released but all eyes are on Covid-19 cases
  • In the US, home sales, manufacturing, services, and consumer data released
  
  To hear more about these topics, please download the latest episode of The Monday Investment Club podcast.