Global Markets Newsletter – March 2021

March was a positive month for the markets mainly due to the strong economic measures declared by the newly elected president Joe Biden. The measures were worth some $1.9 trillion and, among others, included $1400 for every citizen (helicopter money), an additional $400 for every unemployed person, $160 billion for universities and schools to re-initiate and $350 billion for state aids.

Meanwhile, US economic indicators show an eco-nomic recovery with caution. GDP for the last quarter of 2020 was announced positive by 4.3%, industrial production for February declined by 3.1% and retail sales by 3%. Real estate industry continues to improve but March was not a good month as building permits were down by 10.8% and new home sales by 10.3%. Credit remains an issue even though central bank urges commercial banks to lend individuals and companies.

In Europe, economic indicators were not encouraging as first quarter recession is a fact to be announced at the end of May. Similarly, GDP for the last quarter of 2020 has declined by 4.9%. Many cases of Corona virus were detected during March and casualties grew at a disturbing level which led France and Germany to announce tighter lockdowns. Euro economies shrank with retail sales down by 5.9% and industrial production up by 0.8%. Inflation remains the main issue which is not boosted as half of the stores in eurozone are closed and consumption has halved.

In Greece, the stock exchange moved in a price range of 800-870 units. However, the bond market was at its best as three debtissues have been covered by many domestic and foreign investors: the 30-year government bond offering 1.7% yield, the 7-year corporate bond of Motor Oil (yield at 1.9%) and the 5-year bond of PPC (DEH) with a yield of 3.875%.

The EUR/USD reacted and returned to 1.17 showing strengthening of the US dollar. However, as liquidity was increased, the rate is expected to return towards 1.20.

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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