The S&P 500 stayed close to the 4180 levels as names like Apple and Amazon continued to report off-the-chart earnings, taking over from Alphabet and Facebook the week prior. Gains were led by the Communications, Financials and Energy Sector with the broad Tech sector about flat on the week.
The US dollar initially traded lower but recovered toward the end of the week to remain unchanged. Biden's progress report at 100 days seemed to boost sentiment, especially the handling of the vaccine drive and the passing of the stimulus plan. His proposed tax increases are still on the horizon and could cause a dip in market sentiment but a steeper US yield curve and higher inflation breakeven yields indicate the outlook remains positive for now.There were two varied takes on inflation over the weekend - Warren Buffet characterized price rises as 'red hot' in his annual shareholder address, giving the example of mostly metals-based businesses in his portfolio. Yellen on the other hand stuck with the Fed's 'transitory' narrative and said appropriate tools were available should that not be the case.On the corporate side, Apple faces a tough week ahead on the regulatory front. The EU has taken up Spotify's complaint that Apple abuses its market power via its App store and will be conducting an official investigation into the matter. In the US, after Congress heard from companies like Match.com and Tile a little earlier, Epic Games (maker of Fortnite) will look to prove that Apple's 30% cut and monopolistic privileges on its App Store violate antitrust practices.Asia will see a slow open this week with China and Japan markets closed for the first three days. India continues to struggle with the Covid wave as daily deaths hit record highs around 3.7k. The National govt there was dealt another blow over the weekend, with a poor showing in 4 out of 5 regional elections, some in battleground states. On the bright side, international aid will be coming through soon but the lead time in deployment means that the next two months will continue to be difficult. Separately, the WHO is considering the use of Sinovac Biotech's vaccine as a part of its COVAX aid program - there is promising real-world data on the vaccine from its distribution in Chile and about 180m in China have taken it as well.Ahead this week, we have global PMI data with the main event being the Non-Farm Payroll (NFP) Employment report on Friday where the US is expecting another bumper showing of close to a million jobs added in April. We also have rate decisions from Australia, UK and Turkey with a consensus expectation being held in all cases. Earnings continue with names like Moderna, Pfizer, Hilton and Hyatt up this week. On the regulatory side, the Apple antitrust hearings and the Biden tax package debates promise to keep things interesting.
May 4, 2021
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