Integrated Insights -- Week of April 19, 2021

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:

Weekly Commentary -- Why we like emerging market assets -- BlackRock

• 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.

Four reasons not to fear rising interest rates -- Capital Group

Capital group point out that rising interest rates do not necessarily spell doom for bonds or the economic recovery.

Inflationary Pressures Build -- Cetera Investment Management

• Inflation is rising as evidenced by a recent economic report.

• Expectations were for a rise in the price of goods, but services rose more.

• While inflation may continue to rise,  expectations the rise in inflation to be temporary.