Global Markets Newsletter – February 2021

February was a volatile month mainly due to the correction that major markets made. Covid-19 continues having huge implications in the global economy which is heading to a recessionary 1st quarter.

In the US, avoiding lockdowns in major cities has proved vital for local economies. More specifically, unemployment dropped to 6.3% (from 6.7%) and January inflation was announced at 0.3%. Interest rates remain almost zero with no imminent changes. Industrial production rose by 1% (versus 0.9% previously) and retail sales moved to the same direction increasing by 5.3% (from -1%). Real estate industry continues to improve with some turbulence as new home sales went up by 10.4% but building permits down by 6% proving credit slowdown. Existing home sales went also up in a lower pace though (0.6% from 1%) coupled by new home sales (up by 4.3% from 5.5%).

In Europe, recession is more than certain for the first quarter (numbers to be seen at April) but for the time being the last quarter of 2020 was announced at -0.6%. Local lockdowns, closing of stores, schools and hence transportation have led to recessionary consequences. Unemployment in eurozone has remained the same at 8.3% and inflation at 1.4%, increased mainly due to higher oil winter prices. Retail sales have increased by 2% (from -5.7%) but industrial production has decreased noticeably from 2.6% to -1.6%.

In Greece, stocks moved in both directions proving lack of trend. Economy is at a constant lockdown and recession and the national health system is at a marginal stake asking from everyone to remain home stranded.

The EUR/USD reacted and returned to 1.20-1.22 levels with high volumes. Ample liquidity of the dollar may bring the currency to higher levels regarding euro.

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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