Going back to this week’s data, the ISM manufacturing reading jumped from 60.8 in February to 64.7 in March (its highest reading since Ronald Reagan oversaw the economic recovery from the recession in the early 1980s), while the employment reading rose from 54.4 to 59.6 – and as 50 is the line separating expansion and contraction, not only do these readings show that the US economy continues to recover, but more importantly, the recovery is accelerating.
Adding to the list of reasons to be optimistic about post-coronavirus economic outlook, Joe Biden this week announced plans to invest over $2tr on US infrastructure – although it is important to remember that infrastructure work can’t all of a sudden be turned on at a flick of a switch, so its impact, while positive, is unlikely to be seen for several years.
Looking ahead to this coming week, we can expect further rises in global equities thanks to today’s (Friday 2 April 2021) US employment data, as most equity markets were closed and therefore unable to react to the stunning data release, which showed that non-farm payrolls rose by 916,000 in March, while February’s employment rise was revised up by 89,000 to a 468,000 gain.
Our main attention this week will be focused on the minutes from the last Fed monetary policy meeting held on 17 March 2021, given the current inflation debate.
Data wise, from the US we have ISM services; weekly jobless claims; and factory orders. Elsewhere we have Eurozone unemployment; Chinese PMI and Chinese CPI inflation.
Investment Management Team