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Last Week in the City: FTSE breaks through 7,000 level

Garry White, Chief Investment Commentator, provides a round-up of the market movements and the global investing outlook for the week ending 16 April 2021.

Garry White, Chief Investment Commentator, provides a round-up of the market movements and the global investing outlook for the week ending 16 April 2021.
Garry white employee

by
Garry White

in Features

16.04.2021

Britain’s FTSE 100 index hit its highest level since the pandemic crash over a year ago on Friday. The blue-chip index passed through the 7,000-point level early on Friday morning. This is its highest level since late February 2020, when the first wave of Covid-19 infections sent equity markets plunging.

Economic data supported the recovery narrative, helping global equity markets trade near record highs.

The FTSE 100 was up 1.4% over the week and the FTSE 250 was 1.3% ahead by the middle of Friday’s trading session.

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Central Banks: How do they get us out of the pandemic? In this Charles Stanley Radio podcast, we discuss the role and support of global central banks, as well as the ongoing battle between the Federal Reserve and the markets at large. Listen here.

Adam Martell looks at how to get the most out of your relationship with your Investment Manager here.

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Covid-19

Almost half the UK population have received at least one Covid-19 vaccine shot. As of 14 April, 48.6% of Briton’s had been vaccinated.

Shoppers returned to the High Street on Monday as non-essential retailers in England and Wales reopened after more than three months. Footfall had nearly doubled from a week earlier, as queues formed outside branches of Primark, JD Sports and TK Maxx and retailers extended their opening hours. Beauty salons, barbers and pub gardens also reported a surge in bookings.

The US decided to pause distribution of the Johnson & Johnson single-shot Covid-19 vaccine to investigate six cases of a rare brain blood clot linked with low platelet counts in the blood. Anthony Fauci, the country’s senior infectious disease doctor, hopes regulators will make a quick decision and get that vaccine "back on track”.

While markets are looking through the current crisis to a recovery the infection was continuing to spread in countries such as Germany, Brazil and India.

Economics

Economic data supported the recovery narrative, helping global equity markets trade near record highs.

China’s GDP jumped 18.3% in the first quarter year-on-year, with the start of 2020 representing the height of the pandemic in the Asian nation. However, growth was up just 0.6% compared with the fourth quarter 2020.

US retail sales soared during March as Americans received additional pandemic relief checks from the government. Retail sales jumped 9.8% last month, the largest increase since May 2020, with March's rise pushes the level of sales 17.1% above its pre-pandemic level and to a record high.

First-time claims for US unemployment benefits tumbled last week to the lowest level since March 2020, when mandatory closures of nonessential businesses were enforced to slow the spread of the first Covid-19 wave.

Concerns about a sharp rise in US inflation have eased, but Federal Reserve policy remains key to any recovery. Markets may once again test Chairman Jerome Powell’s resolve. We look at the implications here.

Geopolitics

Tension between Washington and Moscow escalated after the US introduced a range of sanctions on Russia in response to its interference in last year's presidential election, cyber hacking, bullying Ukraine and other alleged malign actions. The Biden administration blacklisted Russian companies, expelled Russian diplomats – and barred US banks from buying sovereign bonds from Russia's central bank, national wealth fund and Finance Ministry. The United States warned Russia that more penalties were possible but said it did not want to escalate the dispute. Earlier this year President Biden branded Russia leader Vladimir Putin a “killer”.

The Middle East is being thrown into some turmoil by a possible power realignment from President Biden. China and Russia are also testing his resolve. What does this mean for markets? We take a look here.

Angela Merkel has been Chancellor for 16 years and has said she will not run again for that office. What does this mean for Germany and the EU? We take a look here.

Technology

The £31bn merger between mobile networks Virgin Media and O2 was provisionally approved by the UK's competition regulator. The combination will create one of the UK's largest entertainment and telecoms firms, which could become a major rival to BT Group.

Amazon continued its foray off the internet into physical retail, opening its third UK Amazon Fresh grocery store in White City, close to Europe’s biggest shopping centre Westfield London. Its other two stores are in Ealing and Wembley Park.

Healthcare

Shares in GlaxoSmithKline rose after it emerged that the activist hedge fund Elliott Management has built a sizeable stake in the company. Elliott is known for being an aggressive activist investor, having waged campaigns for change at a number of companies – including BHP and Premier Inn owner Whitbread. GSK’s share price has been under pressure as GSK’s efforts to rebuild its portfolio of new medicines have yet to deliver.

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