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MARKET MONITOR 
|
March 26

MARKET MONITOR | March 26

Chart of the Week


INFLATION

Since April lockdowns, inflation has been more pronounced within a subset of goods such as used cars, sporting goods, and electronics, led by both an unexpected increase in consumer demand and temporary supply chain constraints. If demand-driven inflation proves to be persistently strong, the Fed timing for policy liftoff may potentially be pulled forward. However, this depends on the pace of consumption recovery.

Source: Goldman Sachs GIR, Commerce Dept, Labor Dept. As of Mar 24, 2021.

Market Summary


GLOBAL EQUITIES

Global equities mostly ended higher last week. In the US, stimulus driven optimism pushed the S&P 500 up 1.58%. Meanwhile, European equities rebounded 0.92% as global growth sentiment outweighed headwinds from delayed vaccine rollouts and mixed messages from governments. In the UK, the commodities-heavy FTSE 100 was up 0.58% last week, notching its strongest daily gain in over two weeks, and retracing earlier losses as energy prices rose sharply. Read More

COMMODITIES

Oil prices saw some volatility last week after a container ship ran aground in the Suez Canal and blocked a major oil shipping route. Supply-side constraints outweighed demand concerns as a worsening COVID-19 situation in Europe prompted intermittent selloffs in both WTI and Brent crude oil, which ended the week higher at $60.97 and $64.57 per barrel, respectively. Read More

FIXED INCOME

US 10-Year Treasury yields fell amid Chairman Powell’s comments in Congress citing the unemployment rate “underestimates the shortfall” and progress remains weak in sectors most impacted by the pandemic. Treasury rates partially retraced earlier declines as last Friday’s Treasury auction saw increased demand, ending at 1.66%. Concurrently, short rates stayed mostly unchanged as the curve flattened with the 2-10 Year Treasury spread falling by 6 bps. In Europe, 10-year UK Gilt and German Bund yields both declined and ended the week at 0.76% and -0.35%, respectively, with the latter hitting a five-week low reflecting concerns over lockdown extensions. Read More

FX

The US dollar continued to rise against major peers, supported by a stronger US vaccine distribution and economic recovery. The Euro ended 1.0% lower at $1.1790 against the dollar. Read More

Economic Summary


INFLATION

US Core PCE, which excludes fresh food and energy, increased by 1.4% Year-over-Year in February, marginally below consensus expectations, reflecting a sharp fall in income as stimulus checks ended. Read More

JOBS

US jobless claims fell by 12% to 684K, its lowest level since the pandemic began, as business restrictions begin to ease in some states. UK Unemployment unexpectedly decreased to 5.0% in January, from 5.1% the month prior, even as millions remain on the government’s furlough scheme. Read More

CONDITIONS

March’s Euro area flash composite PMI came in significantly above expectations at 52.5, primarily led by gains in Germany and France. Manufacturing PMI posted at a historical high of 62.4, and Services PMI similarly improved despite tighter lockdown restrictions in the region. Read More

SENTIMENT

The German Ifo Business Climate index jumped to 96.6 in March, up from 92.7 the month prior. The above-consensus print reflected increases in both current conditions and business expectations for the 6 months ahead. At a sector level, the increase was led by trade, manufacturing, and services. Read More

Style Performance


US Equity Size & Style Returns

MONTH-TO-DATE

Large
6.60%
3.78%
1.01%
Medium
5.84%
2.95%
-2.47%
Small
5.89%
1.01%
-3.78%
Value
Core
Growth

YEAR-TO-DATE

Large
12.01%
5.91%
0.24%
Medium
13.78%
8.40%
-1.13%
Small
21.93%
12.71%
4.19%
Value
Core
Growth

MSCI World Size & Style Returns

MONTH-TO-DATE

Large
6.67%
3.54%
0.36%
Medium
5.31%
2.53%
-0.78%
Small
4.88%
2.44%
-0.11%
Value
Core
Growth

YEAR-TO-DATE

Large
10.03%
4.78%
-0.39%
Medium
11.52%
5.88%
-0.51%
Small
13.76%
9.78%
5.72%
Value
Core
Growth

US Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
-0.11%
-0.47%
-4.34%
Corporate
-0.31%
-0.97%
-3.40%
High Yield
0.43%
0.05%
-2.08%
Short
Intermed.
Long

YEAR-TO-DATE

Government
-0.48%
-1.54%
-12.93%
Corporate
-0.58%
-2.14%
-9.00%
High Yield
1.96%
0.77%
-1.62%
Short
Intermed.
Long

European Fixed Income Maturity and Quality Returns

MONTH-TO-DATE

Government
0.11%
0.74%
0.54%
Corporate
0.12%
0.50%
0.07%
High Yield
0.44%
??????
??????
Short
Intermed.
Long

YEAR-TO-DATE

Government
-0.19%
-0.52%
-4.69%
Corporate
0.10%
-0.29%
-3.26%
High Yield
1.52%
??????
??????
Short
Intermed.
Long

Source: Bloomberg, Barclays and GSAM (as of 03/26/21)

VIEW LESS DISCLOSURE

Key Economic Releases


Monday, Mar 29

Tuesday, Mar 30

China Composite PMI (Cons: -, Prior: 51.6)

Wednesday, Mar 31

Euro area HICP YoY (Cons: -, Prior: 0.9%)
UK GDP YoY (Cons: -7.8%, Prior: -7.8%)

Thursday, Apr 01

US Jobless Claims (Cons: 680k, Prior: 684k)
US ISM Manuf. (Cons: 61.4, Prior: 60.8)
UK Manuf. PMI (Cons: 57.9, Prior: 57.9)

Friday, Apr 02

Nonfarm Payrolls (Cons: 643k, Prior: 379k)
US Unempl. (Cons: 6.0%, Prior: 6.2%)

VIEW LESS DISCLOSURE

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