In this week’s recap, we found that US stocks were mostly positive, with the Dow achieving a fifth consecutive record up, despite doubts generated by the high national debt in the US, driven by the covid-19 aid package of Biden. Global shares were flat on Friday as benchmark debt yields climbed, helping to curb the latest stimulus-driven rally. Market optimism had helped Asian shares rise with Japan’s Nikkei up +1.7% but were lower in Hong Kong & India. It faded out in Europe, with the STOXX Europe 600 down -0.5%.
On Monday, the financial sector provided the biggest boost in the U.S. S&P 500, hitting a record, as higher market rates & a steeper yield curve helped banks. Industrials came next, also reaching a record high, while the materials sector neared an all-time peak as well. The technology sector ended the session deepest in the red.
Governments around the world borrowed unprecedented amounts of money to help support workers & businesses during the global pandemic. Collectively they issued $16.3T in debt in 2020, & they’re expected to borrow another $12.6T this year. Some analysts predict that a strong economic bounce back starting this summer, may well generate inflation, potentially forcing central banks to substantially raise interest rates sooner than expected. This will lead to a debt hangover when the new sovereign debt will need to be dealt with.
Elon Musk’s net worth plunged last week by $27B, as tech stocks got hammered & Tesla’s stunning rise where shares gained a total of +743% in 2020, thus propelling it to No. 5 on the list of most valuable firms on the stock market, quickly unraveled. Tesla stock which in the early weeks of 2021, gained another +25% to a record high close of $883.90 on January 26, fell -11.5% last week alone.
The ECB plans to increase the pace of its bond-buying; inflation in Europe could reach + 2% in 2021; Coupang becomes largest US IPO in 2021; North American Lumber Prices Rise Due To High Demand; the Australian economy will grow rapidly in 2021; Musk loses his position as the richest man in the world; GameStop shares surged +41.21% on Monday; relations between the United States and Saudi Arabia could deteriorate; Bitcoin closes its 2nd-best week ever.