Market Summary
-
Economy finding its footing after countries open up from lockdown
Cash
o High disposable income from consumers and consumer demand
o High liquidity amongst companies
 Stock buybacks shows high confidence in the market
-
Huge debt concern
o Countries and companies got passed the lockdowns through insane amounts of
borrowing
 printing insane amounts of money
 35% of all dollars in circulation was printed in the last year
o Companies are extremely leveraged
 Leveraged buyouts are very common
o Housing market exploding all over the world as people spend more money at
home
-
Fueled by low interest rates as central banks does not want to put a stick in the
wheel
o 200k jobs created in the US, lower than expected (500k). But not terrible so
the federal reserve does not really know what to do
-
Inflation worries appear to be quite mixed
o Inflation: EU 3.4%, US 5.4%, China 1%
o Cost Push inflation
 Supply can’t keep up with demand
 Semi-conductor shortage
o Supply Shortages and bottle necks
 Asia slacking behind manufacturing
 Places like Vietnam still have problems with Covid which are
slowing down their productions
o Labour shortages
Equity Markets
- Long term investment companies see an adjustment when taper tantrum is a concern
in the market
o Tesla, Nvidia, Netflix, Virign Media have all gone down as Inflation worries
goes up
-
Share buy-backs
o Indicates that companies believe their shares are undervalued
 Cutting the number of shares in issue can also provide an indirect
boost to stock prices by improving earnings per share — a closely
watched measure of profitability.
 The schemes can directly lift companies’ share prices by reducing the
number of shares in circulation and increasing demand.
Bond Markets
- Yield reacting to inflation worries
o Bonds yields started to ruse at the start of 2021, pushing higher again now
o Inflation concerns rising  Fed’s are tapering of their bond buying and should
finish their stimulus fully by summer 2022
 Had previously been purchasing 120bn worth of bonds every month
Commodity Markets
- Commodity prices are rising due to supply shortages
- Oil is skyrocketing
- Gas prices are going up and the EU will be forced to improve its relationship with
Russia as it gets even more dependent on them