{"id":2543,"date":"2021-04-22T09:45:36","date_gmt":"2021-04-22T09:45:36","guid":{"rendered":"http:\/\/www.wealthatwork.co.uk\/jpm\/?p=2543"},"modified":"2021-04-22T09:45:36","modified_gmt":"2021-04-22T09:45:36","slug":"market-update-22nd-april-2021","status":"publish","type":"post","link":"https:\/\/www2.wealthatwork.co.uk\/jpm\/2021\/04\/22\/market-update-22nd-april-2021\/","title":{"rendered":"Market Update – 22nd April 2021."},"content":{"rendered":"
[vc_row][vc_column][vc_raw_html]JTNDaWZyYW1lJTIwd2lkdGglM0QlMjI1NjAlMjIlMjBoZWlnaHQlM0QlMjIzMTUlMjIlMjBzcmMlM0QlMjJodHRwcyUzQSUyRiUyRnd3dy55b3V0dWJlLmNvbSUyRmVtYmVkJTJGNXNTamh1NjZQRmMlM0ZyZWwlM0QwJTIyJTIwdGl0bGUlM0QlMjJZb3VUdWJlJTIwdmlkZW8lMjBwbGF5ZXIlMjIlMjBmcmFtZWJvcmRlciUzRCUyMjAlMjIlMjBhbGxvdyUzRCUyMmFjY2VsZXJvbWV0ZXIlM0IlMjBhdXRvcGxheSUzQiUyMGNsaXBib2FyZC13cml0ZSUzQiUyMGVuY3J5cHRlZC1tZWRpYSUzQiUyMGd5cm9zY29wZSUzQiUyMHBpY3R1cmUtaW4tcGljdHVyZSUyMiUyMGFsbG93ZnVsbHNjcmVlbiUzRSUzQyUyRmlmcmFtZSUzRQ==[\/vc_raw_html][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Global equity markets have been on the back foot so far this week as coronavirus infections and deaths in India continue to rise.<\/p>\n

While it\u2019s hard to express how upsetting all this is on a human level, from a financial market perspective, not only is India the fifth-largest economy in the world, but more importantly it accounts for around 17.5% of the world\u2019s population.<\/p>\n

As a consequence, on top of the potential for further coronavirus mutations, there is a risk that the world\u2019s supply chains could be further disrupted \u2013 and as financial markets are currently obsessed with inflationary pressures, this is unfortunately playing into the hands of those commenters speculating that central banks (such as the US Fed, BoE, ECB and BoJ) will soon tighten monetary policy, as any supply chain disruption could result in higher prices.<\/p>\n

Although we appreciate that the resurgence in India\u2019s coronavirus cases is obviously a sobering reality check given the continuing decline we are seeing here in the UK, one cannot escape from the fact that global economic recovery is still gathering momentum.<\/p>\n

Furthermore, with coronavirus cases declining in the US, UK and Europe, coupled with the wider availability of vaccinations and the warmer weather, we don\u2019t believe that the current economic recovery is likely to be knocked off course.<\/p>\n

Consequently, we don\u2019t believe that clients need to be worried by this week\u2019s equity market weakness:\u00a0 as we have previously stated, the path for equity markets is never smooth or easy and while we fully expect equity market volatility will remain elevated in the short-term, we don\u2019t believe the current weakness is anything more sinister than fickle market participants being far too eager and far too simplistic in their assumptions that any potential supply chain disruptions will both cut short the economic recovery and lead to higher inflation and interest rates.<\/p>\n

On the subject of inflation,\u00a0yesterday’s UK CPI inflation reading showed inflation had risen to 0.7% in March from 0.4% in February, due to a big increase in fuel costs.\u00a0 As we have previously warned, a sharp rise in inflation in the coming months is a foregone conclusion as last year\u2019s big oil price decline is replaced by this year\u2019s higher oil price.\u00a0 However, as this increase is only transitory and it has not been caused by excess demand, it won\u2019t have any impact on the longer-term inflation outlook.\u00a0 Consequently, we believe that the BoE will look past this year\u2019s higher inflation readings \u2013 and as such, we still believe that higher interest rates remain many years away.<\/p>\n

Investment Management Team<\/strong>[\/vc_column_text][\/vc_column][\/vc_row]\n <\/div> ","protected":false},"excerpt":{"rendered":"

Global equity markets have been on the back foot so far this week as coronavirus infections and deaths in India continue to rise.<\/p>\n","protected":false},"author":1,"featured_media":2548,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"_links":{"self":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/2543"}],"collection":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/comments?post=2543"}],"version-history":[{"count":3,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/2543\/revisions"}],"predecessor-version":[{"id":2546,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/2543\/revisions\/2546"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media\/2548"}],"wp:attachment":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media?parent=2543"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/categories?post=2543"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/tags?post=2543"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}