The world’s equity markets gained ground as the corporate earnings of the biggest technology companies and positive news regarding economic indicators in the US boosted investor morale. The yields on fixed-income securities declined, Eurozone bonds began to mimic their U.S. counterparts and the month of February set a new record for corporate bond sales. The Bank of Japan continues to be hold firm on its stance till the economy achieves its inflation target, even though the country’s stock market reached record levels during the week. The tragic death of numerous Palestinians waiting for aid added more fuel to the fire against Israel and its allies for its annexation of Gaza.

Global Equity
  • The MSCI All Country World Index went up during the week, owing to the growth in jobs announced in the U.S. and solid earnings reported by major U.S. technology firms.
  • The Unites States government narrowly avoided a government shutdown, after the Democratic-majority U.S. Senate approved a short-term spending bill. The Republican-controlled House of Representatives backed it with less than 36 hours before funding would have begun to run out.
  • The European Central bank announced that Eurozone inflation had dipped during January but underlying price growth remained stubbornly high, adding to the case to hold interest rates at record highs a bit longer before starting to ease policy towards mid-year.
  • Finance leaders of the G20 countries failed to agree on a joint statement on global economic development, with divisions over the wars in Gaza and Ukraine overshadowing efforts to forge a consensus.  
  • China’s economy showed further signs of sluggish momentum as factory activity slowed, remaining in contraction territory for the 5th straight month. The property sector also continued to drag and the Chinese parliament is expected to unveil moderate stimulus plans to stabilize growth.
U.S. Equity
  • The S&P 500 slightly rose during the week. The strong economic indicators and stellar earnings from big technology companies was offset by the fears of an impending government shutdown throughout the week and possible delayed cuts in interest rates.  
  • Both Joe Biden and Donald Trump won their Michigan primaries. Even though Biden had an 81% vote, there were concerns of some dissenters who opposed the incumbent President’s stance on the conflict in the Middle East.
  • Goldman Sachs and Mubadala Investment Company have inked a landmark $1 billion agreement to invest in private credit opportunities across the Middle East region.
  • Berkshire Hathway has unveiled a cash pile of US$168 billion as of Q4, 2023.
  • Apple is reportedly ending a decade-long effort to manufacture its own electric car and the stock rallied after the announcement.
U.S. Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index rose slightly over the past week. Bond yields decreased over the week, as expectations of rate cuts and moderating inflation weighed on performance.
  • The U.S. 10-year Treasury yield declined from 4.35% to 4.31% over the last week, while the yield on the 2-year bond came down from 4.75% to 4.64%, causing spreads to widen.
  • Blue-chip companies in the US sold a record $172 billion of bonds in February after falling yields spurred investors to buy debt.
  • The U.S. Dollar Index strengthened over the week.
Sources

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