Please find the latest edition of Weekly Digest attached.
Interest rate fears continued to decrease last week in spite of strong economic data. Bond markets may have been helped by a slightly lower than expected University of Michigan Consumer Confidence report and China Q1 GDP figures coming in below the optimistic projections. UK and European equities outperformed global averages, rising by 1.5% and 1.4% respectively in sterling terms. The VIX volatility index continued to edge downwards to 16.3 from 16.7. It has now traded below 20 since the end of March. Oil prices were firmer on the back of stronger economic news and Brent closed the week at just under $67 per barrel. Gold also edged upwards in response to geopolitical tensions between Russia and Ukraine, rising to $1,777 per ounce. The stand-out data release for the week was US Retail Sales for March, which came in comfortably ahead of expectations:
Global infections continue to increase and are currently at 766,000 per day, up 17% week-on-week. India has seen a surge in infections and is currently at 200,000 infections per day. On the re-opening front, 39% of the US has now received at least one shot and miles travelled on US highways are up compared to the same week in 2019 for the first time since the initial lockdowns:
The US earnings season continues this week following a strong start with large upward revisions thus far. Of the 44 S&P 500 companies to have reported already, 84% have beaten analyst expectations. The average beat has been just over 30%. Results from the Financials sector have been particularly strong, with 94% beating expectations with an average beat on 40%. This week sees a further 80 S&P 500 companies scheduled to report and 54 EuroStoxx 600 companies. Names of particular interest to us include Intuitive Surgical, Procter & Gamble, Rio Tinto, Johnson & Johnson, BHP Group, Roche, ASML, Anglo American and LafargeHolcim. The meeting of the European Central Bank on Thursday of this week will be a key focus, as will the release of UK unemployment and inflation data (Tuesday and Wednesday). This will be followed by UK consumer confidence data on Friday and global PMI data for manufacturing and services on the same day.