In the US, April was a positive month regarding markets, but mixed concerning financial data. Economic injections announced by Joe Biden helped the economy recover and move to a positive direction especially by the “helicopter money” which was given to all citizens. Many billions heading to education, health and infrastructure create further liquidity which is enough for recovering from the Corona virus crisis not only regarding citizens, but also companies which forward much of it to capital markets.
Economic data such as leading indicators like Manufacturing PMI (60.6 from 59.1), initial jobless claims (719k from 729.5k) and non-farm payrolls (916k from 468k) moved to both directions but overall were better off. Lagging indicators such as unemployment (6% from 6.2%) and GDP for the first quarter were also positive (6.4% from 4.3%) showing recovery signs.
Europe is at a similar pace like the US but with a substantial time delay. Local lockdowns in France and Germany created problems to the recovery phase which clearly is expected to strengthen in the 2nd half of spring. Inflation was at 0.9% for March (from 0.2), PMI Manufacturing at 63.3 (from 62.5) and the eurozone GDP was announced higher by 0.6%.
In Greece, there was nothing worth mentioning except for the partial opening of the commercial stores and malls before Easter coupled with announcements for further opening of the markets. Stock exchange ended at the 900 area and bond further declined in yield reaching Italy (10 year government bond yield at 0.97%).
The EUR/USD moved towards 1.20 and is expected to strengthen as many emerging markets need currency reserves in dollars due to devaluating problems of local currencies.
Our preference remains the american equities versus european stocks where we hold no position. US equities hold 60% of the total portfolio which the technological sector holding 60%. Cash remains crucial as corrections are buying opportunities often.
S&P-500 (yearly graph)
Dax-30 (yearly graph)
EUR/USD (yearly graph)
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