Market Updates.

From an equity market standpoint, over recent years the annual Budget Statement has become a damp squib as speeches have become more and more filled with partisan rhetoric and jokes at the expense of the party in opposition: entertaining to watch, but light on meaningful actions or surprises.

Although it has been a quiet week so far for economic data, it has been a volatile couple of days for global equity markets.

Economic data releases have been light so far this week given a number of markets have been closed (for example, the US was closed on Monday for President’s Day, while a number of east Asian markets have been closed for the Lunar New Year).

Global equity markets continue to move higher given the potential reflation of the global economy – no doubt helped by the $1.9tr US fiscal stimulus package that is currently working its way through Congress, coupled with the better-than-expected company result session and the rapid rollout of coronavirus vaccines.

Global equity markets have renewed their upward momentum this week after last week’s social media frenzy-induced volatility dissipated and allowed markets to focus again on Joe Biden’s fiscal stimulus plans and the global economic recovery.

It has been a tough start to the week for global equity markets given some US senators appear reluctant to pass Joe Biden’s $1.9tr fiscal stimulus package, coupled with the slow vaccine roll-out across Europe.

We have had a lacklustre start to the week thanks to the US markets being closed on Monday (18 January 2021) for Martin Luther King Jr. Day, coupled with Joe Biden’s inauguration as President today – although an inauguration isn’t normally a market moving event, given the potential for protests across America, it is getting a lot more attention than usual.

As it has been a quiet week so far on the economic data front, we thought we would address the issue which has recently appeared in many of the business pages of the press: are equity markets in a bubble that is about to burst?

In the words of the Von Trapp children in the Sound of Music, “So long, farewell, auf Wiedersehen, goodbye.”

Not only have global equity markets started the year in an exuberant mood, but the FTSE-100 has literally leapt out of the starter gates this week (as we write, the FTSE-100 is up just over 3% today, taking its gain so far this week to 5.50%).