Last week provided insight into the economic recovery, and the numbers vindicated the optimism that has driven markets higher. An acceleration in inflation was expected, but came in at a rate (+2.6%) that didn’t appear to rattle the markets. It was, however, retail sales (an increase of 9.8%), new jobless claims (576,000--the lowest level since March 14, 2020), continuing unemployment claims (the lowest four-week moving average since March 28, 2020), and housing starts (+19.4%) that emboldened investors.
Here's what we are reading this week:
BlackRock see the restart, stabilizing U.S. Treasury yields and relatively cheap valuations boosting emerging market (EM) assets after a choppy start to 2021.
U.S. stocks hit record highs and 10-year Treasury yields fell to the lowest level in more than a month. Major U.S. banks reported positive first-quarter earnings.
Purchasing managers’ index (PMI) data from key developed economies this week could shed light on the state of the economic restart.