The recovery recedes, and depresses the markets

by time news

Time.news – A certain reigns pessimism on financial markets around the world: according to analysts, the ‘sentiment’ it is deteriorating and to weigh above all the lockdown in Europe where the third wave has taken hold and vaccinations are proceeding slowly.

The restrictions are not loosened for now, nor in Germany where despite Merkel’s turnaround for Easter, the lockdowns remain until April 18 and neither in France since a third of the country including the Paris region is closed. Also in Italy the pandemic ‘bites’ and in Spain the situation is out of control.

Potential US tax hikes and growing tensions between the West and China that are undermining the risk appetite of markets play their part.

In short, investors they don’t see the recovery close at hand and their discontent do not spare even the overseas price lists. In the Usa, however, today the news is positive: the Pil in IV quarter was revised upward as the number of U.S. workers filing new jobless claims fell more-than-expected last week to 684.000, the lowest level in more than a year.

There is no doubt that the grant applications remain objectively high, but the data suggest that tax aid and the distribution of vaccines they are helping the labor market to return to normal, albeit slowly. Analysts expect demand to drop sharply when restrictions are fully relaxed in the second quarter.

The data on the American GDP is also comforting: the stars and stripes economy grew in the fourth quarter of 4.3% cyclical, against + 4.1% of the second reading and against + 4% of the initial estimate. Analysts expected a confirmation of + 4.1%. For many observers, on this front, the beautiful surprises will not be long in coming.

As he claims for example Lydia Boussour, US chief economist at Oxford Economics, “This year, the economy is poised to see the fastest real GDP growth rate since the early 1980s – he said, according to Reuters reports – as health improvements, expansion of vaccine distribution and the generous fiscal stimulus will form a powerful growth cocktail. “

The analyst therefore predicts that the economy will arrive at an annualized rate this year close to 10% in spring and summer.
But these positive news were not enough today to revive the markets: the increase in Covid-19 cases has certainly dampened the euphoria that had pushed the shares up so far, even if it seems that today’s trend depends in particular on a rebalancing end of month after the great outperformance of stocks versus bonds.

And, as the sell-off continues globally, with the STOXX in Europe and the S&P 500 falling to two-week lows, the pressure on the prices of bonds it is easing and yields have fallen further from recent highs.
Finally, the moment of discontent did not spare even the Petroleum: fears of a drop in demand cancel yesterday’s rally due to the accident in the Suez canal. While the Brent in London it travels under $ 62, at Nymex il Wti leaves 5.54% on the ground at 57.79 dollars a barrel.

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