Market Overview – 22/03/2021

Despite a slight uptick in volatility, market performances were not too badly impacted as the FTSE 100 and US equities were both down roughly 0.8% for the week. Additionally, even with the dip in performances, both UK and US markets are still positive so far in 2021, recording 3.7% and 4.2% year-to-date, respectively. Additionally, we are likely to see some positive outcomes following the rollout of the $1.9 trillion stimulus package in the US. Given it is still a heavily outsourced consumer market, this significant injection of cash is likely to be good news for the rest of the world in the coming months.

We also saw two key central bank meetings take place last week from the Federal Reserve in the US and the Bank of England. Both central banks were hesitant to make any drastic alterations as they try and reiterate their positivity with the recovery seen so far. The US is also enthusiastic with the rate of unemployment falling to 6.2% from its peak of nearly 15% in April 2020. Bond yields have been moving higher on expectation of rising inflation, however. The Fed’s Chair Jerome Powell announced the rate of inflation is likely to surpass their 2% target for a period of time before they consider raising interest rates, potentially not until 2023, which is a similar tone shared by the Bank of England.