Market round-up: 19-23 April

Thomas Watts


This week

With the mooting of a European Super League for Europe’s most marketable football clubs having unraveled almost as quickly it surfaced, much like the return on the shares of its proposed constituents, it was left to more orthodox holdings to lead global bourses higher.

Although companies such as Manchester United saw their price jump around 10% on Monday morning, it was Europe, the epicentre of the plans, which saw an extension of a record setting rally as optimism about a strong earnings season offset worries over a resurgence in COVID-19 cases. Into its fifth day of gains, it was car makers that were in pole position, with the Autos index up 0.7%.

Across to the British Isles and a slew of labour data showed that Britain's unemployment rate unexpectedly fell for a second month in a row to 4.9%. Although not falling as fast as certain Premier League clubs’ shares prices by Tuesday, the numbers did show that the government's huge job retention scheme was having the desired effect of keeping workers in their jobs. The falling rate, confounded economists’ predictions of a slight rise in those leaving the work force.

However, the data from the Office for National Statistics also showed that the total number of jobs lost since the onset of the coronavirus pandemic had reached 813,000 - more than half of which were held by people aged under 25, with hospitality-heavy London the hardest-hit region.

As we headed into extra time for the week, it was palladium prices that were hitting the back of the net, reflecting tighter supply dynamics being ushered into the market. Commerzbank's research showed the market is set to show a sizeable supply deficit this year partly due to robust demand from the automotive industry. Spot palladium jumped as much as 4.7% during the middle of the week, surpassing the previous records set in February 2020. Prices have climbed more than 17% in 2021, building on five straight annual gains.

Next week

The last full week of April sees quite the contrast from last year as the UK starts looking forward to eased restrictions rather than impeding ones, perhaps reflected in the key data-release scheduled for this week.

Tuesday sees the release of the Confederation of British Industry’s Realised Sales figures, an in-depth dive into how retailers have been performing over the past month. The data also acts as a leading indicator of consumer spending because retailer and wholesaler sales are directly influenced by consumer buying levels, and therefore can tell us a lot about confidence on the high street. With a reading above zero indicating a higher sales volume and below zero, contraction. Unsurprisingly retailers have not seen an expansionary figure in sales since September. However, with an easing in lockdown restrictions giving a reason for the consumer to spend, economists will now be hoping for this trend to start reversing.

Staying on the theme of the mood of the consumer, the US releases its Consumer Confidence figures during the middle of the week, a major piece of data for the world’s largest economy. How confident the consumer feels is inextricably linked to their spending habits and therefore has a severe effect on inflation expectations. The data is so well respected due to its comprehensive nature, surveying about 3,000 households, asking respondents to rate the relative level of current and future economic conditions including employment availability, business conditions, and their overall economic situation.

It is in the US where investor focus will remain as the week is rounded off with quarter on quarter GDP figures, the broadest measurement of economic activity available. Measuring the change in the inflation-adjusted value of all goods and services produced by the economy, the data is sure to have a large impact on financial markets as investors seek to gauge just how well the recovery from the worst of the COVID-19 pandemic is progressing.

The information in this blog or any response to comments should not be regarded as financial advice. If you are unsure of any of the terminology used you should seek financial advice. Remember that the value of investments can go down as well as up, and could be worth less than what was paid in. The information is based on our understanding in April 2021.