MARKET UPDATE – 8 MARCH 2021: SPRING BUDGET

It was a mixed week for stock markets globally. The week’s news focused on inflation concerns, business confidence, stimulus packages, the easing of
restrictions and vaccination progress. In the UK, Rishi Sunak’s Spring Budget called for more fiscal stimulus.

• US: A step closer for the $1.9 trillion stimulus package
  The US Senate has voted to approve President Biden’s $1.9 trillion stimulus package. Fears of rising inflation amidst hopes of economic growth send Treasury yields higher and weighed on stock markets.

• Asia: Mixed week but with improving business confidence
  Chinese shares fell and Japanese stock markets had a mixed week. The Japanese manufacturing sector grew for the first time in two years, whilst the services sector saw a fall in activity. Chinese manufacturing and services data was weaker than expected.

• Europe: Vaccinations, lockdowns and economic recovery
  The EuroStoxx 50 ended the week higher buoyed by prospects of easing restrictions and monetary and fiscal policies which could set the stage for an economic recovery. Italy blocks export of Covid-19 vaccine to Australia.

• UK: Spring Budget and improving economic forecasts
  A “Spend Now, Tax Later” Budget, the Office for Budget Responsibility’s projections that the economy would recover sooner than expected, and a weaker Pound sent the FTSE 100 up 2.5% during the week.

• The Week Ahead
  • In the UK, GDP numbers for January will be in focus
  • In Europe, the ECB meets this week and industrial production data will be published
  • In the US, all eyes will be on Joe Biden’s stimulus package.
  
  To hear more about these topics, please download the latest episode of The Monday Investment Club podcast.