From the Trading Desk: Global Market Recap

In the U.S., wearing a face mask will not be required for fully vaccinated citizens, Germany’s Covid-19 spread continues to fall, Turkey is looking to start easing restrictions on its population, and Italy’s vaccination efforts show high effectivity in controlling the pandemic. Meanwhile, Hong Kong will impose travel restrictions from Taiwan and Singapore. Taiwan posted a record number of new cases locally and is facing the worst outbreak of the disease while Singapore will shift to full home-based learning on May 19th. India’s new cases are falling, but the death count keeps rising. 

Meanwhile, stocks slid for three days in a row last week amid resurgent fears of inflation. However, investors saw this slide in stocks as an opportunity to buy the dip. Big tech stocks have been the main driver of the S&P 500 Index, but when they fall, many investors still see an opportunity to buy them at a cheaper price. How much higher can stocks go? Only time will tell us the answer, nevertheless, the current market environment is becoming more and more challenging to navigate. 

S&P 500 (May 10-14)

Commodities were also on the red last week, with the Bloomberg Commodity Index losing 1.87%. Some of the latest protagonists were down and lost most of the gains posted in the previous week. Most agricultural commodities were down for the week, alongside the metals, like Iron Ore. 

Bloomberg Commodity Index (BCOM)

China’s effort to control the rise in Iron Ore’s price proved effective, the metal stumbled over 11% in Singapore. The Chinese government is concerned about the rise in metals because they may impact the profitability of Chinese manufacturers. 

Iron Ore (SCO)

The recent moves across asset classes are demonstrating that markets will not go up indefinitely. If it continues higher, the ride up will likely not be as smooth as in past years. The pandemic has had a major impact, after historical amounts of government and central bank stimulus to reactivate economies, inflation fears are rising. The Fed has insisted that current price inflation will be transitory. Investors, however, are on a constant look out for hints of the Fed’s intentions and whether conditions may tighten in the future. For the retail investor who might make decisions based on what he/she sees on the news, the future may be cumbersome.