March 29, 2021

Written by: Sid Mohapatra

This week marks the one-year anniversary of the shortest bear market in recorded history with March 23rd marking the lows of the C-19 financial crisis. On that note, risk assets were slightly better offered last week with the TSX down little over a percent. However, from a longer time frame perspective, S&P 500 and the TSX are up 6% and 8% respectively for 2021. Also, notable is the V-shape recovery from last year’s lows wherein risk assets are materially higher gaining as much as 75% for the S&P 500.  

The economic releases for last week were relatively light and markets continue to reminisce between the sharp broad-based recovery and the recent jolts administered by interest rate volatility. One notable reading was the strong decline in US weekly jobless claims by almost 100k to 684k and the first print below 700k in weekly jobless claims. This plays well into the narrative that the economic recovery is underway and we can continue moderate upside this year with fiscal stimulus support and easing of lockdown restrictions will be constructive for economic recovery prospects.

The S&P 500 closed at 3,975 up 1.6% this week and 5.6% on a yearly basis. However, the TSX lost 60bps but remains in the green by 7.5%. Interest rates calmed down by rallying 10bps to finish at a respectable level of 1.50% for the US Ten year. On the commodities front, we see WTI crude settle at $60.34 a barrel and although up 25%, it has settled from the recent froth observed in commodities markets.

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