It has been a quiet start to trading for the week. Bloomberg has a “Global Markets Movers” page that I consult every morning, and I would have to go to the Seychelles to find a currency – the Seychelles rupee – that has moved by over 1% against the U.S. dollar (USD) today. It is up 4%, and yes, I do wish I were there to observe it personally for the next week or so.
Coming back to reality and an admittedly beautiful Los Angeles, the USD is generally slightly weaker against its major counterparts as noted in our daily chart. This seems to be a combination of the 10-year yield being on the low side of its recent range and some better economic data in other countries. Equities are mildly positive around the world, and U.S. and European yields are slightly positive to start the week. \
The real market-moving events of the week will be a flood of quarterly earnings releases. Arguably, these would be the most important, in any event, since we get a real taste of how companies are viewing the economy as a whole – everything from consumer sentiment and political gridlock to supply-chain bottlenecks. The first part of April brought a bumper crop of positive economic reports for the U.S., so expectations of good earnings reports and almost wildly optimistic outlooks are getting baked in to market expectations.
The global COVID-19 story is decidedly mixed. The U.S. was rocking its vaccine rollout until the J&J pause came along, but that should get resolved one way or another this week, and the U.S. jabs will get back on track in my opinion. The Centers for Disease Control and Prevention has said that half of American adults have received at least one dose. And even with the two-dose regimes in use in the U.S., one dose is doing its job. A U.K. study of the Pfizer vaccine showed that it can be 85% effective after the first injection.
Outside of the U.S., this pandemic is another story. China’s Sinovac vaccine is showing only 16% effectiveness after the first dose and 67% after the second dose. That result will definitely help slow the virus, but in places like Chile, where it is being used, resurgences continue. And of course, the well-publicized outbreaks in places like Brazil and India only add to the urgency.
Good luck and stay in touch. | |
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